And while the IDB loan was new business, the House had to deal with some
old business as well. In August, the House passed the Income Tax on Petroleum
Companies Bill with rare bi-partisan support. That would have ended it on a
sweet note, but the Senate blocked the Bill's passage. PUP Senator and Cabinet
Minister Eamon Courtenay led the charge, pending further review and adjustment.
Those adjustments were made with two amendments: that 40% income tax will have
to be paid retroactively to January of 2006, not March, and it will have to
be paid in U.S. dollars. But there's one more thing that never made it into
the Bill. It's called a rental return tax - which would have taxed oil companies
for making more than a 15% rate of return on their investment. Cabinet killed
that amendment, but still, its given life to a newfound UDP resistance to the
Bill.
Today party leader Dean Barrow who had endorsed the Bill in August, reversed
his position. His critics would call it a flip-flop, but Barrow says his party's
new position is informed by Senator Courtenay's position.
Hon. Dean Barrow, Leader of the Opposition
"The assurance that this 40% was the best that we could do. When the
Bill went to the Senate, the government's own Minister on the Senate, Minister
of Foreign Affairs and Foreign Trade, the PUP's Senator Eamon Courtenay, on
the basis that it was simply not enough, that it did not represent the best
that we could get for our country. And as I understand it, he proposed some
kind of rate of return tax that would give in fact Belize a far greater share
of the oil revenues. Senator Courtenay's proposal was ultimately shot down.
As I understand it, it went back to Cabinet and it was rejected in Cabinet.
But Madam Speaker Senator Courtenay is no fool, is a man of experience,
and if he considers that that forty percent that is in this Bill is less and
considerably less than we should settle for, if he considers that it is less
and considerably less than we could properly get, that changes the picture fundamentally.
In addition, Madam Speaker other things have happened. The entire nation
has listened spellbound to those tapes first played by WAVE Radio, I know the
Prime Minister is a great fan of WAVE Radio, in which the owners of BNE are
heard saying clearly and explicitly that investors in BNE who got in on the
ground floor can expect now a return of twenty dollars for every dollar they
put it in. Now I know my math is poor, does not that amount to something like
a 2,000% return?
This kind of rate of return is almost obscene. We believe in capitalism,
we believe in the market, but we also believe that this oil, this non-renewable
resource, which is found in our country under our earth, is the kind of thing
that our considerations of nationalism will not allow us to see exploited in
a way where the foreign operators can make a two thousand percent return.
Things are further complicated because of the perception that has developed
now that the government is playing footsie with BNE. There is a perception based
on their sharing of Tony Quinn and the sense that people have, that their retreat
was paid for by BNE, I don't know that that is so and there is no proof of that,
but there certainly is a perception and that has complicated matters terribly.
We have to take the position now Madam Speaker that this is worth revisiting,
that all the circumstances demand that this is revisited. In the same way that
this government has in fact utilized the powers of the sovereign legislature
to introduce their forty percent, a succeeding government will similarly be
in a position to utilize the sovereign powers of the legislature to ensure that
excessive profits on the part of BNE to the prejudice of the Belizean people
will not be allowed to stand and we serve notice that the situation will have
to be revisited because of what we are convinced now is the truth. What has
been proposed, what has been passed, is far from fair to the Belizean people."
Rt. Hon. Said Musa,
"I find it curious, the statement made by the Leader of the Opposition
today when in fact he fully supported the 40% tax when this matter came and
was debated in this National Assembly. Clearly what has happened here is that
the Leader of the Opposition is exposing the fact that he is suffering from
serious pressures in his own party. The extremists in his party have taken over
and he is no longer leading his party. This is what is happening, this is exactly
what is happening. He has buckled under pressure from the extremists in his
own party and that is why he came here today with this self-righteous statement
as if in other words to cover his grounds and to say a future government will
change the rate of the tax. Well of course any future government can do that.
He is not saying anything new. The government to this day is convinced that
this 40 percent tax will yield a fair and reasonable and appropriate amount
of revenue for the government and the people of Belize."
While Barrow will have to get his own windfall tax, this Bill has now been
passed with the two amendments.
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