Tourism Taxation Study PDF Print E-mail

Background Information

Tourism is one of the main engines of growth in the Belizean economy and the principal source of foreign exchange. The sector generated US$290 million in visitor expenditures in 2007, accounting for 71% of total services exports and corresponding to approximately 22.4% of total GDP1. Over 25% of the employed national labor force is estimated to be related to or driven by tourism, placing tourism at the forefront of the country’s economy, and contributing significantly to the revenue base though income tax collected through PAYE contributions.

The institutional framework for the sector consists of the Ministry of Tourism Civil Aviation and Culture (MTCAC), responsible for tourism policy, the Ministry of Finance (MoF) responsible for overall tax and revenue generation, the Belize Tourism Board (BTB) representing a strategic partnership between the Government and the Private sector and responsible for implementing tourism policy. The BTB revenues are derived mainly from accommodation taxes (80%) and the cruise passenger head tax (14%). A Protected Areas Conservation Trust derives revenues from a conservation fee collected from every departing visitor, in addition to twenty percent of all concession fees, recreation related licence fees, cruise ship passenger fees, and permit fees collected in conjunction with the public protected areas of Belize. The Trust provides funds for supporting conservation and promoting environmentally sound management of Belize's natural and cultural resources to foster sustainable development.

The development of the National Sustainable Tourism Master Plan will include strategic recommendations on policy, tax and investment.

STP INVESTMENT:

The STP will invest US$50, 000 towards a study to examine the level of taxation levied on the Belize tourism industry with a view to assessing whether the current taxation regime impacts unfairly on tourism and its key sectors, identifying any inequities relative to other industries and establishing whether the current taxation regime places Belize's tourism industry at a competitive disadvantage relative to the taxation regime of competitor countries. Assessment and recommendations will be undertaken using guiding principles of good taxation which include equity, efficiency, neutrality, compatibility, adequacy, convenience and simplicity

Overall Goal:

"To evaluate existing government policy and taxation on the entire tourism industry and its components, with recommendations and actions to strengthen the taxation system and its administration, to better enable Belize tourism to compete within the global marketplace, increase profitability of tourism businesses and attract new investments while achieving adequate tax revenue returns for the Government. The consultancy will serve to sensitize the Government of Belize and tourism administrators to the current issues and contributions of taxation as related to the tourism industry."

Current Project Status:

November 2010 – March 2011 :Negotiations ongoing
October 27th 2010 : Selection process completed and submitted to IDB for review and approval
October 20th 2010 :Evaluation of CVs.
September 13th 2010 :Receipt of CVs
September 8th 2010 :Revision of TOR and budget.
August 24th 2010 : Expressions of Interest have been received from 5 individual consultants to carry out a Tourism Taxation Study for Belize
May 2010 : Submission of TOR package to IDB for approval
January 2010 :Preparation of Terms of Reference for consultancy services.