Public Service Union Raises Concerns Over Disparate Tax Regime

The Public Service Union (PSU) has expressed concerns over the current tax regime. As it stands, member of the ordinary workforce pay twenty-five percent in taxes, but for specialized professionals, they are paying six percent. There is a wide disparity in the taxes paid which the union president, Dean Flowers, says need to be revised.

Dean Flowers, PSU President: “The concern that we that we continue to hear from workers and not only public offices where the 25% PAYE is unfair and unjust versus a 6% professional tax that lawyers pay. You have lawyers, you may very well have engineers who provide professional services, you might have accountants, amongst others they do not pay a tax rate of 25% as most workers who earn in excess of $26,000 pay while they may earn in the millions, as we’ve heard many law firms earning millions for one case the partners only pay six percent. There is also another argument that where the professional tax is concerned it may not even be that if there’s a joint partnership providing those professional services that they would pay six percent. So you might see two professionals getting together registering a company or a business and paying a professional tax of 6% but in fact if it’s two of us and we’re able to somehow manipulate that professional tax then it would be pretty much both of us paying 3% each. Now so those are some of the criticisms that we’ve heard as to why it is unfair that we continue to pay 25% as workers earning in excess of $26,000 versus a professional who earns much more.”

President Flowers went on to speak of the flawed system, indicating that there are many who bypass the twenty-five percent through misleading applications in the tax system. He went as far as saying that the very culprits are some that sit around the negotiating table, talking about reforms.

Dean Flowers, PSU President: “The system is flawed and I will say this, there are many professionals out there who are full-time employees of certain private companies who do not register with the Belize Tax Services Department but they register rather as professionals. So rather than paying 25% they’re only paying 6% and that is a fact. And I mean, it would be very foolish of anybody in tax administration to deny that because we know and we have several examples of that and that’s why we’re saying that something needs to be done. Not only because we know that that’s an area that is being exploited, but from the mere fact that there are professionals who are earning millions of dollars on an annual basis who are only paying 6% if at all because we don’t know if all of them are registered. We don’t even know that. But once you’re an employee you don’t have a choice you have to be registered. Once you are a worker, you have to be registered it doesn’t matter whether you’re in the private or public sector there is no way out. And that is straightforward out of your salary that 25% on your taxable income. So it’s a serious issue. We are not happy about it. We continue to call it out each time we meet with the government but it’s not easy because when you speak to government, and in this case not of course to point out the current negotiating team for the government but when you look across the table if that legislation would change it would affect the very people across the table. So they would be the last ones that would want to champion such a reform.”