May Breeze 2010 - The Placencia Breeze

The Placencia Breeze –May 2010-Page 6Impacts of Belize’s New Budget on the Tourism Industry and Employee/EmployersThe Placencia BTIA is always looking for ways toprovide its membership with information that willhelp with the smooth running of their business.Please check out these excerpts from the budgetspeech and budget this year that could be ofinterest to you.Environment♦ Belize derives its economic sustenance from ourenvironment. Proper management andsustainable use of our environment is thereforecritical to long term economic growth. Thegovernment will strengthen framework andprocesses for environmental management includingenforcement of environmental compliance.♦ In particular, great priority is given to solid wastemanagementRevenue Replacement DutyAs of the 1 st of August, the remaining Revenue Replacement Dutywill be removed from both Regular and Premium Gasoline, and onAviation Spirits and Jet Fuel. This tax will be replaced by a lowerflat tax per gallon which will be added to the existing customsduties applicable to these products. This will have the effect ofstabilizing the taxes applied to these products and would alsoresult in future changes in acquisition costs passing directlythrough to the price.Revenue Measures to provide support to the TourismSectorThe tourism sector has grown into the major source ofemployment, income generation and foreign exchange earnings forBelize. Accordingly, the industry has begun to make notablecontributions to the development of small communities in the ruralareas where poverty is highest. The potential for even greaterstrides is enormous, and that is why we keep saying that tourismis perhaps the major star to which we’ve hitched our wagon.With the economic slowdown in North America,however, the industry is facing the difficult challengeof maintaining visitor arrival levels in the context ofincreasing competition from other destinations. It istherefore critical for the tourism industry to improveand maintain the quality of the services provided. Thestakeholders in the industry are engaged in a processof strategic planning to meet the challenges which lieahead and have already signaled the difficulty theyare facing, particularly the smaller hoteliers, inundertaking the investments necessary to improve thequality of their facilities because of rising operationalcosts. Tourism operators have insistently pressed toreview the structure of taxation of the industry. This is anespecially complex matter and we have, therefore, agreed tocontinue the process of consultation. As an interim act of relief,though, and to assist the relatively large number of smallertourism operators to deliver a better quality of service, governmentproposes the following revenue measures:♦♦The provision of import duty exemptions on capitalimports for small registered hoteliers seeking to expandand/or improve the quality of their facilities.The provision of import duty exemptions on passengervans to allow small tour operators to improve thequality of their tourist transportation services.TAX RELIEF MEASURESThat increase in the basic income tax deduction foremployed individuals earning less than $24,000 per annum, isfrom $19,600 to $23,600. This in effect would mean that allemployed individuals earning less than $24,000 per annum wouldbe exempt from tax, while those individuals earning more than$24,000 would continue to be eligible for the current basicdeduction of $19,600. Further, this change will take effectretroactively for the tax basis year commencing 1st January 2010.