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PM explains how much will be saved from cost cutting measures

As the Prime Minister went into details as to how much monies will be saved from the cost cutting measures the Government has already implemented, he also gave a snapshot of how much the public revenues have declined since the COVID-19 pandemic came to Belize.

As the Prime Minister went into details as to how much monies will be saved from the cost cutting measures the Government has already implemented, he also gave a snapshot of how much the public revenues have declined since the COVID-19 pandemic came to Belize.

Rt. Hon. Dean Barrow, Prime Minister of Belize: “These measures are absolutely necessary but in fact they are woefully insufficient. Here is why. A snapshot of the current financial picture looks like this. For the month of April 2020 collections of business tax and GST together were just 48% of what was collected in April 2019. This decrease was from 45.8 million dollars in April 2019 to only 21.8 million dollars in April 2020. Remember too that these taxes are paid in arrears, so to speak. So, the April 2020 collections relate principally to March 2020 business activity. March was, of course, before the lockdown. The point being, that this May month’s 2020 collections relating to April 2020 business activity, when the lockdown was in full effect, will see an even more precipitous fall. The projection, in fact, is that April’s fall to 21.8 million dollars will drop further to only 11.2 million dollars in May. Now consider further that Customs and Excise also fell in April 2020 to 20 million dollars. That was a 10 million dollar drop over April 2019. Again, the Customs revenue was principally for goods ordered before the lockdown. The same pattern therefore as with business tax and GST, will be repeated with respect to the Customs revenues. Accordingly, the reduction in goods ordered after the start of the lockdown this past month, will see a further fall in Customs collections in May 2020. Consider finally that the Government’s monthly wage bill is 45 million dollars. That means that the 41.2 million collected from business tax, GST and Customs in April could not meet that 45-million-dollar monthly wage bill. The story still does not end there because there are, of course, Government’s other operating expenses.”