A rare press release today came from the Belize Business Bureau in which it says it is applauding the Briceño government’s transformative policies. The bureau is referring to the reduction of the public debt from 133 percent to 89 percent; the government’s campaign of constitutional reforms and addressing some of the economic challenges facing the middle class. President Arturo Lizarraga was asked for the rationale by the bureau to take this position. Here’s what he had to say.
Arturo Lizarraga, President, Belize Business Bureau: “It’s transformative because we’ve been in a downturn. We’ve been in a shock, in a state of shock for many years. It’s not two years of COVID. It’s almost like 15. Small businesses paid a terrific price in the last administration. They suffered greatly. The focus was on nationalisation of two big companies, BTL and BEL. Nothing about the small business and all this whale, people were losing their homes, losing their business. They were suffering. In fact, I could give you a good example. Mr. Mencias who was now the CEO of BEL was once a small business, He had to cave in and find employment so it’s not just one. It’s many and it has no political colour. So the fact that this administration not only moves from tightening on the fiscal space then goes in and says listen, you’ve been through COVID. You’ve been through this terrible dry desert spell of 10, 15 years. Let’s give you a break and what more can you do than incentivise people to spend and invest. If you tell them look, I’ll give you a million dollars duty free and now they can afford that pickup. They can afford that dump truck. They can afford that equipment that they could not afford because of taxes and what that tax situation does is it leads to the corruption so when you get that vehicle you have to pay somebody else at the border and you have to pay somebody else and Government ends up with maybe 20% of the cheque so it does two things. It cleans up the corruption and it also allows the small family business to own something, to recover from the COVID, to recover from the last ten years and to invest and to create a new job.”
In the statement, the BBB is asking the Government to consider not implementing taxes including GST for small businesses for four years. The bureau argues that Government will not go into the pockets of start-ups and small businesses but instead these MSMEs can reinvest in their businesses, translating to more jobs. Here’s how Lizarraga makes that argument.
Arturo Lizarraga, President, Belize Business Bureau: “We are very supportive of that direction and we’d want it to be the four years incubation because that is necessary. Remember, part of the problem we faced, and this affects all nations, people, there are lots of small businesses that are not in the formal sector. It’s called the informal sector. There’s this famous book about the informal economy and that economy needs to be registered. They need to be paying taxes but how can you do that? People will run away from that sort of thing if they’re not motivated or encouraged to do so. So, if you tell them look, I’ll give you four years tax free if you register. So then you can track, you can literally start to track what their activities are and you can then start explaining how growing the small business, how many jobs they’ll be producing. Remember they’ll be applying for concessions. They’ll be applying for equipment. They’ll be demonstrating data, big data. We cannot manage if we don’t have data. So bring in the informal sector into the formal sector. It’s a better mechanism to manage, to track, and to score our progress. You know, in a game you have to keep score and this is one mechanism where we have to keep the score so you’re right. The incubation period is necessary not just for growth but also for the ability to track how well we are doing.”