IMF recommends adding GST to basic food items; PM says “We can’t do that”

By Zoila Palma Gonzalez: On February 17, 2023, the International Monetary Fund (IMF) published their preliminary findings following a mission visit in Belize from February 2 to 14, 2023.

The team met with Christopher Coye, Minister of State; Joseph Waight, Financial Secretary; Kareem Michael, Governor of the Central Bank of Belize; and other senior government officials, representatives of the opposition, private sector, and public sector unions.

“Belize has ample space to raise revenues by broadening the tax base, raising excise taxes, and strengthening revenue administration,” the report said.

Among the recommendations included taxing some zero-rated items at the standard 12.5 percent general sales tax.

The IMF noted that this rate could raise 1.6 percent of GDP in revenue.

Notably, the GST zero-rated food items include basic food products such as rice, flour, corn, fresh meat, eggs, beans, fresh fruits, fresh milk, bread, corn and flour tortillas among others.

During an interview with 7News Belize, Prime Minister John Briceno said that with high inflation at this time, the Government cannot consider it an option.

“Well, we listened to the IMF respectfully but at the end of the day it is for us to be able to make that decision. It is unconscionable for us to look at trying to implement taxes on basic food items especially at a time right now. Later on down, a few years from now that inflation has been tamed and it has gone down maybe we can take a look at it but certainly, right now we cannot and we will not take a look at increasing taxes on basic food items,” the Prime Minister noted.

Other recommendations of the IMF included raising fees on vehicle registrations, driver licenses, and increasing excises on fuel.

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