But "footsy" is just what some say government has been playing with petroleum companies doing exploration in Belize. For months Cabinet has been consulting with experts to determine the rate of tax for petroleum companies operating in Belize. Unlike every other company that pays a 1.75% business tax on their gross revenue, Cabinet has decided that oil companies will pay 40% on their income after expenses, or income tax. As the Prime Minister explained, the decision was made because no other country in the world uses a gross tax for oil companies, and according to their math, government will still get 50% of the earnings. While a 40% income tax may seem dodgy, compared to say a 19% tax on the gross for a company like BTL the Prime Minister said government had to be reasonable.
Rt. Hon. Said Musa,
"Today so many voices can be heard on the radio discussing what is to be done. Indeed there are those scream out that we should take over the company. But a government, as the Deputy Prime Minister said a while ago, must act responsibly. The present bill exempts the companies engaged in petroleum operations from business tax and imposes an income tax rate of 40% of the chargeable income. This would bring the petroleum legislation in Belize in line with that of other oil producing countries. Taken together, it is estimated that Belize will receive as much as 50% of revenues from the oil companies. Madam Speaker it will be apparent from what I have said that the rate of income tax for oil companies should not be taken in isolation. Other fiscal parameters already mentioned such as price sensitive productive share arrangements could take care of government's interest when windfall profits occur and protect the operators when crude prices fall."
