Economic Overview
Monetary development cooled remarkably toward the finish of 2018, with GDP development more than dividing in Q4 on a sharp compression in modern part action. The segment was generally weighed on by a sharp decrease in power age because of an absence of precipitation amid the quarter. In addition, development directed in the administrations area— the motor of the economy — regardless of more grounded the travel industry in the quarter.
On a more splendid note, movement in the essential segment animated quite on account of taking off citrus and banana generation. Swinging to 2019, the Ministry of Finance introduced the FY 2019-2020 draft spending plan in mid-March. The monetary allowance to some degree loosens up financial solidification endeavors, in spite of high obligation intrigue installments, and underlines foundation expenses.
Energy is relied upon to direct this year somewhat because of a moderating the travel industry area. Additionally, the auxiliary area will probably keep on delaying development, while a compelled financial position will constrain government spending.
A high open obligation load, the likelihood of poor climate conditions—which could hamper horticulture, the travel industry, and vitality creation—and more blunt worldwide development additionally compromise the standpoint. FocusEconomics specialists anticipate that GDP should extend 2.1% in 2019, which is unaltered from a month ago’s gauge, and 1.7% in 2020.
Main sectors of economy
Belize’s economy has experienced various radical changes amid its long history. Amid the long rule of the Maya Empire, territorial exchange metal, jade, cacao, and resources shaped the foundation of the pre-Columbian economy. With the landing of English Baymen in the sixteenth century, logging of mahogany and logwood was the central action.
As Britain solidified its control in the nineteenth century, Belize turned into a center point for developing sugar stick. Today, the nearby economy in Belize has a few key divisions, including sugar stick, citrus, bananas, angling and fish, clothing assembling, and the travel industry.
Snapshot of the Belizean economy:
- GDP (purchasing power parity): $2.534 billion
- GDP by sector: agriculture: 29%, industry: 16.9%, services: 54.1%
- Labor force – by occupation: agriculture: 10.2%, industry: 18.1%, services: 71.7%
- Unemployment rate: 8.1%
- Budget:revenues: $376.5 million
- Budget expenditures: $412.5 million
- Inflation rate (consumer prices):0.3%
- Commercial bank prime lending rate: 14.14%
- Agriculture – products: bananas, cacao, citrus, sugar; fish, cultured shrimp; lumber; garments
- Industries: garment production, food processing, tourism, construction, oil
- Oil: – production: 3,511 bbl/day, – exports: 2,260 bbl/day, – proven reserves: 6.7 million bbl
- Exports: $395 million. Partners: US 35.6%, UK 21.5%, Ivory Coast 5.3%, Italy 4.5%, Nigeria 4%
- Export commodities: sugar, bananas, citrus, clothing, fish products, molasses, wood, crude oil
Taxes in Belize
- Businesses, companies, and self-employed persons are liable to pay business tax. These rates vary according to business classification:
- Receipts from radio, on-air television, newspaper business, domestic airline business and service stations (Sale of Fuel and Lubricants); at 1.75%
- Receipts of entities licensed to provide telecommunication services that offer real time voice services; 19%
- Receipts from “Other Trade & Business” (items not otherwise specifically mentioned in the Act); at 1.75%
- Rents, royalties, premiums and other receipts from real property; at 3%
- Income from profession, vocations or occupation; at 6%
- Earnings of an insurance company; at 1.75%
- Receipts of institutions licensed under the Banks and Financial Institutions Act ; at 15%
- Financial Institutions within a PIC group now pay 8% on their receipts, which previously were taxable at 4%
- Gross earnings from gaming establishments and casinos taxable at 15%
- Real Estate agents are taxable at 15% on their gross commissions
- Receipts of entities providing electricity services; at 6.5%
Exemptions
as prescribed by the Income and Business Tax Act:
- Receipts of any local authority where income is not derived from a trade or business managed by the local authority.
- Earnings of any ecclesiastical, charitable or educational institutions
- Any pension paid by any person or authority outside Belize to a retired person who is residing in Belize.
- Payments received under any social security scheme or fund, whether made by a person resident in Belize or abroad, provided such payment are prove to the satisfaction of the Commissioner to be social security payments.
- Interest from any debentures, treasury bills, treasury notes or bonds issued by or under the authority of the Government of Belize.
- Interest payable by any person on capital used in specified development industries or projects
- Interest payable by the Government on monies borrowed by it from, or debts owed by it to, sources outside Belize.
- Earnings for other trade or business of less than $75,000 per annum and $25,600 for professions, vocations or occupations..
- The income from a scholarship, exhibition, bursary or any other similar educational donations held by a person receiving full time instruction at a university, college, school or other educational institutions.
Investing in Belize
Trade Agreements
Belize profits by profession concurrences with a few created nations. These include:
- Particular market access to the Caribbean Common Market (CARICOM)
- Special treatment from the U.S. under the Caribbean Basin Initiative (CBI)
- Under the Lomé IV Convention it has obligation free access to the EU for specific items, for example, bananas and sugar
- Certain Belizean products enter Canada obligation free.
The Government of Belize’s Investment Incentives
The Belize government offers various motivating forces to draw in internal venture. These include:
- 100% remote responsibility for and organization resources
- Support of joint endeavors with neighborhood substances
- Unique motivating forces for retirees.
Belize’s Export Processing Zones
For particular kinds of organizations, Belize’s Export Processing Zones (EPZs) give considerable advantages to financial specialists. Financial specialists who exploit EPZs are regularly in the matter of the travel industry, horticulture, mariculture, conveyance, and light industry.
For Belize, the advantage of these unhindered commerce zones is an approach to empower outside exchange and venture.
For investors, the favorable circumstances include:
- Exception from import and fare obligations as assessments on capital increases, property, deals and utilization, exchange turnover, remote trade, and exchanges
- A salary charge occasion of 20 years with an alternative to expand and deduct misfortunes from benefits following the time of the duty occasion
- Dividend tax exemption in perpetuity
- The opportunity to open foreign currency bank accounts in Belize and abroad
- Exemption from the Supplies Control Act and its regulations