WILL BELIZE BENEFIT FROM IMPLEMENTING SARA?

Belize is in the process of transitioning its tax administration system into a Semi-Autonomous
Revenue Authority (SARA). The government aims to restructure the Belize Tax Service
Department (BTSD) into a more flexible entity that can better manage human resources and
optimize tax collection. The initiative was highlighted in Prime Minister John Briceño’s 2025 budget speech, where he outlined tax reforms, including the establishment of SARA and the introduction of electronic invoicing to curb tax evasion. The government sees this move as a way to modernize revenue collection and improve efficiency. The project is being led by a Project Manager, who is responsible for defining policy, legal, and operational scopes, as well as ensuring a smooth transition of personnel into the new system. The government is collaborating with technical assistance organizations like CARTAC to support implementation. Semi-Autonomous Revenue Authorities (SARAs) have been implemented in various countries, particularly in Africa and Latin America, to improve tax administration efficiency. Studies suggest that granting tax agencies more autonomy can lead to better revenue collection, improved taxpayer services, and enhanced compliance management. Some key findings from international experiences include:

 Higher revenue performance: Countries like Kenya, Mexico, Peru, South Africa, Uganda,
and Venezuela have seen improvements in tax collection after adopting the SARA model.
 Administrative efficiency: SARAs often have self-financing mechanisms and
independent personnel systems, allowing them to operate with greater flexibility.
 Challenges in sustainability: Some SARAs, like Peru’s tax agency, struggled to maintain
reforms due to political and institutional instability.
 Risk of corruption: In some cases, increased autonomy has led to governance issues, as
seen in Uganda’s SARA, where corruption concerns emerged.
The success of SARAs depends on strong governance, clear legal frameworks, and effective
oversight mechanisms.
Belize can enhance the effectiveness of its Semi-Autonomous Revenue Authority (SARA) by
adopting best practices from successful implementations worldwide. Key recommendations
include:

1. Clear Legal Framework – Establish specific enabling legislation that defines SARA’s
   autonomy, governance structure, and accountability mechanisms.
2. Strong Governance Model – Implement a management board with a mix of public and
   private sector expertise to oversee operations while ensuring transparency.
3. Operational Independence – Allow SARA to manage its human resources, budget, and
   administrative processes independently to improve efficiency.
4. Technology-Driven Tax Administration – Invest in electronic invoicing, digital tax filing,
   and data analytics to enhance compliance and reduce tax evasion.
5. Anti-Corruption Safeguards – Establish strict oversight mechanisms to prevent
   governance issues, as seen in some SARAs that struggled with corruption.
   Belize may encounter several challenges when implementing its Semi-Autonomous Revenue Authority (SARA), based on experiences from other countries. These include:
6. Legal and Institutional Resistance – Transitioning from a government-run tax department
   to a semi-autonomous entity may face opposition from bureaucratic institutions and
   policymakers who prefer centralized control.
7. Governance and Oversight Issues – Ensuring transparency and accountability in SARA’s
   operations is crucial. Some countries have struggled with governance failures, leading to
   inefficiencies and corruption.
8. Funding and Sustainability – SARAs often require self-financing mechanisms, but if
   revenue collection does not improve quickly, financial sustainability could become a
   concern.
9. Technology Integration – Implementing electronic invoicing and digital tax systems
   requires significant investment and technical expertise, which could pose challenges in
   Belize’s current infrastructure.
10. Public Trust and Compliance – Taxpayers may be skeptical of the new system, especially
    if enforcement mechanisms are perceived as overly aggressive or unclear.
11. Human Resource Transition – Moving personnel from the Belize Tax Service Department
    (BTSD) to SARA may require retraining and adjustments in employment terms, which
    could lead to resistance.
    Belize can tailor its Semi-Autonomous Revenue Authority (SARA) strategies by aligning them
    with its unique economic and legal landscape. Based on recent developments, here are key considerations:
12. Legal Framework Adaptation – Belize is already reviewing tax laws, including property
    transaction taxes and the General Sales Tax system. SARA should integrate these reforms
    to ensure compliance and efficiency.
13. Technology Integration – The government is implementing electronic invoicing with
    support from the Inter-American Development Bank. SARA should leverage this system
    to enhance tax collection and reduce evasion.
14. Human Resource Transition – The Project Manager for SARA is tasked with ensuring a
    smooth personnel transition from the Belize Tax Service Department (BTSD). A
    structured retraining program will be essential.
15. Revenue Diversification – Belize is transferring Land Tax collection to SARA.
    Expanding its scope to other revenue streams could improve financial sustainability.

This article is contributed by Glenn D. Godfrey, a former Attorney General Member of
the Belize National Assembly, and senior partner of Glenn D. Godfrey & Co. Glenn D.

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