It should be public revenue, but since June of 2003 the stamp duty paid into government has become private pork; 79% of it goes to the Private Registry and 21% goes back to the government.
The unbelievably sweet deal for the private registry was first exposed on Wave Radio over a week ago and since then, it's been the 7NEWS headline every evening and the talk shows' primary topic every morning. And tonight, the media's responsibility to speak truth to power has been confirmed because Cabinet, apparently shaken by the exposure of the scandalous arrangement, today decided to cancel the contract with BELIPO and recover the stamp duty that it paid to the Private Companies Registry.
According to a government statement, Cabinet decided to terminate its contract with the Belize Intellectual Property Office, which owns the Belize Companies Registry Limited. Now, in a dramatic reversal, the Ministry of Finance will move to get a full refund of the $2.2 million in stamp duty paid to the registry for the Sunshine and E-com shares.
It's a quite remarkable and surprisingly willful development from a Cabinet that often seems too beleaguered or confused to correct its own mistakes. And it is that, a Cabinet approved, GOB sanctioned privatization mistake designed to enrich well connected affiliates of the Musa administration. Who are those friends? Well according to the company's papers filed in that same Private Registry, the owners are the Leader of the Opposition's brother, Attorney Denys Barrow and Belmopan businessman David Jenkins. The Leader of the Opposition has gone on record to declare as fact that there are at least two other silent shareholders, one a current minister, and the other a former minister.
And while that may never be proven we do know that the contract with BELIPO was signed by the then Attorney General Godfrey Smith. His then Solicitor General Elson Kaseke is listed as one of three BELIPO directors and Kaseke's wife administers the Registry Office. The company earned its income in a 70% to 30%, not an 80% to 20% revenue sharing formula. But, in a neat arrangement for the private owners, it ended up working out to be 79% for BELIPO and 21% for GOB because 30% of government's 30% had to be given back to BELIPO to pay the private company's operating expenses.
Sure enough, it's a deal that carries the stench of corruption and today's decision to terminate it comes with the air of indignation, making it seem as if the Prime Minister and senior members of Cabinet never knew about the revenue sharing arrangement. But until we get an admission from the Prime Minister and Minister of Finance that he never knew 80% of stamp duty revenue was not going into his Ministry, we'll have to assume that he did know which means that taking the right decision now after the private registry has flourished for two years is hardly a praiseworthy correction to the permission of an unconscionable revenue sharing arrangement. Moreover, acting now to get back the $2.2 million in stamp duty paid for Michael Ashcroft's companies, still does not explain why government, which is not subject to tax, will be paying stamp duty for a British billionaire.
But while Cabinet has now taken the right decision, canceling a contract isn't as easy as that. There is still the matter of a termination penalty or there may be the need to buy out the contract. For the time being however, it seems government has adopted the stance that it will just cancel the contract and basically dare the registry owners to sue which, if they are good party supporters, they likely will not. At this time, there is no announcement of whether it is going back to the Public Registry or whether it will be referred to a new private company under a different revenue sharing formula.
