So while government has found an able ally in Ashcroft's E-com, many still complain about the price GOB had to pay for that alliance. A release today from SPEAR accuses government of acting irresponsibly and illogically by writing off Ashcroft's $12 million tax debt. SPEAR has asked the Governance Improvement Commission and the Senate to investigate the contract between the Government and E-com. In this regard, it has been noted in other quarters that the Prime Minister may not have the authority to write off tax debt without going to the National Assembly.
And while there is still that to be contended with, at a Cabinet Brief presented by former Attorney General Godfrey Smith with Attorney General Francis Fonseca and Minister of State in the Ministry of Finance, Joe Coye, they addressed the issue of government writing off the taxes claimed to be owed by the Carlisle Group. Minister of State in the Ministry of Finance Jose Coye and Minister of Tourism Godfrey Smith defended government's actions claiming that Ashcroft did not get a tax write off.
Alfonso Noble,
I say can we really afford to be writing off $13 million dollars in taxes when we have a deficit of 21 millions?
Jose Coye, Minister of State in Finance
"Well maybe I should leave that to someone who can explain to you the legal technicalities, but what I can say to you is that the government has no authority to write off and what may be seen as a write-off is not a write off but the legal person can explain. I am saying that simply because the taxes that have to be assessed, now it's a question of a procedure, if your taxes are assessed and you're saying this is what is owing to the government that will be an accounting procedure and you pay the government that. But whenever there is a cost in the settlement of litigation outside of the court it will be a cost of government and it will remain an accounting procedure but the legal technicians can better explain it. So its not that the government is saying we can write-off this account."
Alfonso Noble,
But they have written off $13 million in taxes, which you won't collect from Lord Ashcroft.
Jose Coye,
"That's why I'm saying we can spread the rest of the day looking at the legal technicality and the procedures. It's not a writing off of the ax as such. Writing off of the tax is suggesting that the government is getting nothing in return but it's a question to the effect that, if you owe me and I owe you, how you want to settle it."
Godfrey Smith, Minister of Information
"The point that is being made here is that its an agreement where both sides will agree to mutually withdraw and leave along litigation pending against each other. Basically that is what it is, a setoff, rather than a...I suppose its debatable...its open for people to describe it as they see fit. From our perspective, as a government trying to settle the BTL matter and trying to clear the path for a move forward, it was vital to that process that litigation be removed. We can't absolutely that we would have won or lost any particular case, that is always yet to be seen. You are familiar with the appeals process, it can drag on for years. If you take a matter all the way to the Privy Council you are looking at 3 to 4 years into the future before something is otherwise settled and a government in that situation, with a matter as weighty and serious as the BTL issue, has to make certain judgement calls, certain value calls, and this is what we did in this instance."
Jose Coye,
"If we were to go through with the litigation, as they were, and we say fine this is our demands and we go to the court for it for the taxes, we know that there is an area in the IBC Act that is a bit ambiguous but we'll have to go argue our case. If we succeed in the case in the court with our litigation, certainly we'll collect our taxes. If we go to court on the other litigation, with the Carlisle Holding litigation, and if they were to succeed on that litigation, the cost of that could exceed the cost of the taxes. So I would say indeed that the decision taken by the government is one that can be argued as to whether it's worth it or not. I believe that down the road we will know whether in the end we achieve what we set out to do and whether the cost was reasonable. But to say at this stage now that we agreed to withdraw litigations and that if we had not withdrawn whether it would be better for us, is really difficult to say."
The Cabinet Briefers also addressed the issue of government ceding jurisdiction to a foreign court. Surprisingly both past and present Attorney General said it is not a practicing norm to do so.
Adele Ramos, AMANDALA Newspaper
"Why would the government of Belize have waived?"
Francis Fonseca, Attorney General
"It was something done when I was not Attorney General but let me say very clearly, and I think as a principle and as a practice, that is generally not a good idea to cede jurisdiction. But these are decisions that are taken from time to time and it's easy to say what if or why. Our job is to deal with the issues that we are faced with today and try to find best ways of settling these matters."
Godfrey Smith,
"I don't think I can do better than the Attorney General. I agree with him that as a rule, we shouldn't do it, you should keep jurisdiction in Belize. It was done in that case, I might not necessarily agree it ought to have been done, but it was done. I really can't answer why it was done in that particular case. In the future we will hope that in international agreements of that nature, we will ensure that jurisdiction resides in Belize."
It should be noted that while Fonseca stated that granting the Miami Court jurisdiction did not happen during his time, the E-com share purchase agreement, at least the draft we saw, again gives up sovereign immunity. We say the draft, because, in the true spirit of reform, government is still keeping the final contract secret.
Those comments came during today's Cabinet Brief at the Central Bank where other Cabinet issues were discussed. Among those were government's plan to reconfigure this year's budget that is falling short of $20 million due to recently decided on tax re-programming. To achieve this, government announced that it will once again be cutting down on recurrent expenditure in areas of travel and subsistence, material and supplies, operating costs, maintenance cost amounting to $5.5 million. Another $6.3 million will be saved with reduction in Capital II expenditures across a number of Ministries and a final $8.5 million to be saved in cutting of Capital III expenditures.
Other topics in the Cabinet Brief included government's plans to move the existing garbage disposal site from mile 3 to mile 24 on the Western Highway. Also it was announced that government is awaiting a list of proposed persons from the NTUCB to be appointed as forensic auditor to the DFC Commission of Inquiry.
