Belize has been a paradise destination for a large number of tourists across the American Continents. Being positioned at an eccentric location between both the American Continents, Belize offers enormous business options in its region. Having an extensive mainland area and abundance terrestrial and marine species range, Belize is a perfect tourist destination for nature lovers. Placed in the globally significant Mesoamerican Biological Corridor, Belize shares its boundaries with the Caribbean and American Nations, thus have strong trade ties with these countries. Being the centre for immense tourist visits throughout the year, the tourism business industry in the country makes a substantial profit and contributes significantly to the country’s economy.
The country has a spread-out business sector with many business opportunities. The major industries which provide business options are the agricultural and cultivation industry, the tourism industry, and the industrial and production goods sector. The government of Belize has its own set of Taxation Norms for businesses running in its region. The General Sales Tax (GST) is a Tax Return that is proposed by the Belize government for various enterprises running in the country. The Department of General Sales Tax is the government body which administrates the General Sales Tax in the country. The foremost aim of the government for implementing the GST is to collect revenues, registering the agents and auditing of the agent’s accounts to ensure the safety of income and business.
Benefits Of Filing GST in Belize
The General Sales Tax (GST) is applied to only those businesses which make their Sales or gross revenue of $75000 or more annually. Apart from these factors, the company must be in operation for 12 or fewer months, and then only the business will be deemed eligible for GST registration. The GST is usually chargeable on goods and services being provided in the Belize region only. The supplies which are exempted from GST include financial services, medical products, and also some agricultural products like rice, flour, beans, sugar and other locally produced fresh fruits and vegetables.
The person operating any business in the region who matches the eligibility criteria for filing GST should become a Registered Taxpayer, and the following benefits will also be provided to the Registered Person.
Input Tax Credit
The person who registers the business for the GST return will be able to claim a credit for GST paid on his business purchases. This explains that when a person places any purchase order for his business, the input tax on the purchases will be covered under GST and the person will be able to claim the credit for the GST he paid for his business purchases.
GST Credit for Customers
The customers buying any product or service from any store will also be given tax invoices for the purchases they made. These invoices can only be issued by the person who is Registered for GST services. The Registered Person will issue the tax invoices to the customer who is registered so that the customer will claim the tax credit for their purchases.
Few other benefits that the Registered Person can get from GST are
- Better feasibility of logistics
- GST removes cascading effects of other unnecessary taxes
- Simple and easy to implement
Disadvantages of GST
Although the General Sales Tax (GST) in Belize is implemented to benefit the businesses as well as the economy of the country, it does have some issues that the person who wants to be registered may face. Some disadvantages are as follows.
Increased operational costs
If any business falls under the criteria for filing the GST return, the Registered person needs to make further arrangements to complete the proceedings and formalities for submitting the tax. For arranging the necessary documents and hiring the related staff, an additional cost will be required; this may result in small businesses facing financial issues. The companies need to be aware of the GST compliances, and that eventually will lead to an increase in their overall expenses.
Being Adaptive to GST Laws
General Sales Tax is quite a new scheme which all new and existing businesses require to follow. The existing companies followed the traditional way of filing the tax return and hence will find it challenging to adapt to new rules of GST. The General Sales Tax will be submitted through an online system to provide transparency between the government and businesses. The Registered Person will be required to keep a digital record of the invoices, file returns, and other documents. Hence, the companies may face difficulty to grasp the regimes of GST and its norms.
The General Sales Tax in Belize is overall a beneficial scheme for all the businesses running in the region. Although it has few adaptability issues and people may find it difficult to adjust in its norms, but it also has many benefits in its system. The GST will allow businesses to follow a uniform tax code and eventually will lead the companies getting free from government restrictions and help grow the economy of the country.
How can we help?
We here at Business Setup Worldwide provide various business consultancy assistance to investors. We are a team of experts who are keen to help out people who aspire to set up business in the region providing them with GST return filing assistance, business registration, location information, and many other business-related services. Feel free to contact us for any query, we would love to help.