Belize's Surplus: Can They Afford To Donate?

Belize is a small country in Central America with a population of around 360,000 people. The country gained independence in 1981 and has a stable democratic government. The Belizean economy relies heavily on tourism and agriculture, with exports including sugar, bananas, citrus fruits, and crude oil. While the economy is growing, Belize continues to face challenges such as high unemployment, a growing trade deficit, and large foreign debts. With this context in mind, can Belize afford to give surplus money to the UN or other international organizations?

Belize's economy

Belize has a developing free-market economy. It is a small, private enterprise economy that is based primarily on agriculture, tourism, and services. The country has a unique cultural heritage and is the only English-speaking country in Central America.

Belize has since shifted its focus to new sectors, with cane sugar becoming the principal export, alongside citrus fruits, bananas, seafood, and apparel. The country's arable land is limited, with only a small fraction under cultivation. Agriculture employs about one-fifth of the population, with most farms being smaller than 100 acres and many of them being milpas (temporary forest clearings).

Belize's primary exports are citrus, sugar, and bananas. The country has a trade deficit, largely due to low export prices for sugar and bananas. The economy is highly susceptible to external market changes, and the country relies heavily on foreign trade, particularly with the United States, which is its number one trading partner.

Tourism is the most important source of foreign exchange, with the country's natural capital, including the largest coral reef in the Americas and extensive mangroves, attracting visitors. The tourism industry has experienced rapid expansion, with the number of visitors increasing fivefold from the late 1990s to the mid-2000s.

The discovery of oil in the town of Spanish Lookout has presented new prospects and challenges for Belize's economy. The country also has limited domestic industry due to high-cost labour and energy, and a small domestic market.

Belize is considered a tax haven, and its economy is expected to grow at a rate of 2-3% in the medium term.

The Belize dollar

Today, the Belize dollar is printed at the British firm of Thomas De La Rue Ltd. and features an image of Queen Elizabeth II on the front. However, future Belizean dollar bills will not feature the portrait of King Charles III. Instead, they will depict Belizean national heroes, including George Cadle Price and Philip Goldson.

The country's GDP

Belize is an upper-middle-income country in Central America with a gross domestic product (GDP) of $2.5 billion and a per capita GDP of $6049 as of 2022. The country's GDP growth rate reached 15.2% in 2021 and was estimated to be 9.6% in 2023. The economy is expected to grow at a rate of 2-3% in the medium term.

Belize has a unique cultural heritage and is the only English-speaking country in Central America. It has close sociopolitical and economic ties to the Caribbean and is a member of CARICOM, which provides access to members' markets and trade agreements. Belize also has strong economic ties to the United States and Mexico due to its proximity.

The official currency of Belize is the Belize Dollar (BZD), which is pegged to the US Dollar at a fixed rate of BZ$2 to US$1. The country's economy is export-oriented, with tourism being the most important source of foreign exchange, followed by agricultural exports and remittance inflows.

Belize experienced a sound economic rebound, fuelled by increased tourism and tourism-related construction. However, public debt remains high at 72.8% of GDP in 2022, and the country underwent an external debt restructuring in 2021. The unemployment rate in Belize fell to 5%, the lowest ever recorded, but labour participation remains low.

Taxation in Belize

Belize is considered a tax haven, and its taxation system is relatively simple compared to other countries. The country operates a territorial tax system, meaning residents only pay personal income tax on income derived from within Belize. Foreign income is not taxed.

Income Tax

Income tax is levied at a rate of 25% of taxable income, with deductions for residents that vary based on earnings. To be considered a resident, an individual must be physically present in Belize for at least 183 consecutive days during a calendar year.

Property and Land Taxes

Property and land taxes vary between 1% and 12% of the land's value, depending on whether the property is developed, used as a rental, and its location. Property taxes outside of cities are based on the value of the land to encourage development.

Capital Gains Tax

There is no capital gains tax in Belize.

Real Estate Transfer Tax

Real estate transfer tax is levied at a rate of 10%. The owner usually pays a 12.5% rate tax for closing costs based on the total property price.

General Sales Tax (GST)

A 12.5% GST is applied to most goods and services, with exemptions for basic food items and medical supplies.

Departure Tax

A departure tax is payable when leaving Belize, at a rate of USD39.25 when leaving by air. The fee is slightly less when departing by land or sea. The tax must be paid in US dollars and in cash.

Business Taxes

Businesses pay taxes on gross receipts monthly, with rates varying from 1% to 25% depending on the type of business. There is also a yearly corporate income tax, from which the business tax paid is deducted.

Other Taxes and Duties

Vehicle taxes are assessed when registering a vehicle, and customs duties are levied on imports, with rates varying depending on the good, its use, and origin. The duty can be as high as 50%.

The cost of living in Belize

Housing

Belize offers a range of housing options, from basic wooden homes to more expensive concrete homes with air conditioning. The cost of renting or buying a home depends on the style and location. For example, a two-bedroom home in San Ignacio, inland Belize, can be as low as US$600 per month, while a one-bedroom condo on the coast in Placencia or Ambergris Caye is at least US$1,200 per month.

Utilities

Utilities such as water and internet are relatively inexpensive in Belize. For example, a couple can expect to pay around US$20-50 per month for water and US$25-80 per month for internet. However, electricity is expensive, with a residential rate of $0.45 per kWh. A couple running air conditioning in their home may see their electric bill average around US$150 per month.

Food

The cost of food in Belize varies depending on the type of food and location. Local shops have limited selections, and buying items online can incur additional costs for shipping, customs duties, and taxes. Eating out in touristy areas can also be expensive, but there are cheaper options available if you ask the locals for recommendations. Belize's national meal, stewed chicken, rice, and beans, is a cheap and filling option that can be found at roadside stands for $6 to $8.

Transportation

Transportation costs in Belize can vary depending on your chosen method of travel. Gasoline is expensive, about two to two-and-a-half times the price in the US, and vehicle fuel costs range from US$5-7 per gallon for gasoline and less for diesel. Public transportation is the cheapest way to cover longer distances, with bus fares ranging from $1 to $15 depending on the distance travelled.

Healthcare

Healthcare costs in Belize are generally much lower than in the US, and insurance is often unnecessary. A local "urgent care" visit might cost around $25, while more advanced lab work could cost around $200. For more advanced medical care, some people choose to travel to Mexico, where the standard of care is higher but costs remain low.

Entertainment and Leisure

Entertainment and leisure activities in Belize can be pricey, with activities such as snorkelling, scuba diving, and fishing costing $65-100 per person. However, locals sometimes get together to hire a boat and captain, splitting the cost and saving money compared to taking an official tour.

Income

The average household income for a Belizean family of two adults and two children is US$700 per month. A couple from North America could survive on US$1,000 per month if they own their home, but US$1,500 would be more reasonable.

Overall, the cost of living in Belize is significantly lower than in the USA, and it is possible to live comfortably on a fraction of the budget required in the US.

Frequently asked questions