New Income And Business Tax Act Introduced To The House Today
November 14, 2008

The House of Representatives met today in Belmopan. First to note at today's sitting was the new Clerk of the National Assembly, Herbert Panton. Panton took over from Conrad Lewis who served as Deputy Clerk of the National Assembly and then Clerk of the National Assembly for more than 10 years. But a more pressing issue brought to the house today was the introduction of a bill to amend the Income and Business Tax Act. This act will allow the Government to increase the Business Tax collected from the telecommunication sector from 19% to 24.5%. Prime Minister and Minister of Finance Dean Barrow presented the bill.
Prime Minister Dean Barrow
"As long as this sector continues to be characterized as a duopoly, Government will always have to look very closely at the profits made by the duopoly with a view to even out things in terms of the take that the Government, and therefore the consuming public, ought to achieve or secure by way of the tax revenue. The sector is characterized by a duopoly because there are only two companies that operate in that sector, Speednet and Telemedia - formerly BTL. Where you begin to talk about land lines though, it is actually a monopoly, because Speednet only operates in the mobile phone sector - land lines are the exclusive preserve of Telemedia. As I said, we are convinced that given that these are the only two players and that they have a captive telecommunications market, they can afford to pay the increase in taxation that the amendment to the act proposes. I don't see how if you have a monopoly with respect certainly to land lines, you are part of duopoly with respect to the entire telecommunication sector, you have enjoyed that monopoly or duopoly status for years and years and years, you make $41 million in net earnings. I don't see how you can say that paying an additional $3.5 -$3.6 million in taxes will squeeze your operating margins so that you have to start to talk or threaten layoffs, it doesn't make any sense."
Prime Minister Barrow said that in the case of Belize Telemedia Limited, they can afford to pay the increase in Business tax with no direct effect to their gross and net incomes.
Prime Minister Dean Barrow
"In determining whether what the Government proposes to do in increasing the rate of Business Tax, it will have the effect that they contend for � you have only to recollect that the amount by which the Business Tax proposed to be increased is almost exactly equivalent to the amount that Telemedia was due in any case to pay under the loan note. And since they had budgeted for those payments under the loan notes, since those payments were an accepted part of their operational expense profile, how on earth can they say that paying now not by way of the loan note because that will be their argument, paying almost the exact amount by way of an increase in the Business Tax can affect their bottom line. All that is necessary is to show that there is no net increase in what Telemedia was already committed to pay. So reign fire on the Government if you want for the in principle increase in the Business Tax for the telecommunications sector, but Telemedia cannot be heard to say that the payment of that increase will affect them and cannot be heard to say that this will cause them to have to contemplate a staff lay off. The people of this country and the people of Telemedia, the workers of Telemedia need to know the truth."
The Business and Income Tax Amendment Bill will be carried through all its stages so as to get input from various committees of the House.
One bill that was passed today was the Disaster Preparedness and Response Amendment Bill 2008 and the Natural Disaster Management Immediate Response Loan; Tropical Storm Arthur, Loan Motion 2008. The Disaster Preparedness and Response Amendment Bill 2008 formalizes what the Government had been doing and allows for affected areas to be declared disaster areas without declaring a National Emergency. The loan motion 2008 was presented to the House today after the Government had received the loan from the Caribbean Development Bank and has used it to clean up areas affected by Tropical Storm Arthur. The loan available to the Government is in the amount of US$500,000. The Red Cross will be able to access $400,000 immediately from the grant.
Also approved in the House today was the appointment of Cynthia Pitts as the news Ombudswoman, and Godwin Arzu as the new Contractor General.