Tourism in Belize: Options to Tax and Regulate the Home-Sharing Sector

The tourism and hospitality sectors are among the hardest hit by the outbreak of COVID-19, which has impacted both travel supply and demand. The World Travel and Tourism Council (WTTC) estimates that tourism constituted 45% of the GDP, 40% of total employment, and 42% of total exports in Belize last year. Given this heavy dependence on tourism, Belize’s economy will be one of the world’s tourism-dependent economies most affected by the pandemic. Apart from its immediate impact on employment, the unparalleled shock of COVID-19 in the tourism industry will have wide-reaching implications, including on the fiscal front.

The fall in economic activity will translate into lower tax revenues and additional spending to contain the sanitary and economic crisis. While the long-term outlook of the COVID-19 pandemic is still highly uncertain, the recovery of the tourism industry might take time. The government’s immediate response to the crisis requires helping these sectors sustain jobs and support viable companies at risk. However, the country should be prepared for the comeback of the tourism industry, with plans and programs, but also with regulations that are conducive to building a more resilient and sustainable future.

In coming years, Belize will face the extraordinary challenge of promoting growth in the tourism industry while enhancing tax revenues being distributed to the applicable jurisdictions to support a more sustainable fiscal environment in the country.

Currently, alternative sources of accommodation such as Airbnb are not regulated and do not contribute to tax revenues, which generates an opportunity to analyze the regulatory framework and create strategic alliances that could benefit the tourism sector and support a sustainable fiscal environment in Belize. Moreover, the home-sharing facilities could be more resilient in a post-COVID scenario as they do not use common spaces for guests, making even more necessary the sector’s regulation. This study addresses potential regulatory and tax policy responses that could be adopted by the government of Belize for the new home sharing sector of the country.

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