And while the allegation of scandal was the most sensational news coming out of today's House sitting, the biggest news, particularly for Belize Natural Energy, is the final decision on the income tax for petroleum companies. In June when government first proposed a 40% income tax, Belize Natural Energy held a press conference to say that the tax will force them to leave Belize because it will put a financial stranglehold on their operation. Well, government treated that as a straight bluff, and today the Prime Minister presented the bill for the second and third readings without amendment, meaning the 40% tax that BNE fussed so much about stands.
Rt. Hon. Said Musa, Prime Minister
“The legislative framework that is put in place for the petroleum industry is fair and balanced to encourage oil exploration as well as to secure a just return for Belizeans from this new industry.”
Hon. Dean Barrow, UDP Leader
“Clearly the populace, the electorate, wants to be certain that this country will get the full benefit of the oil industry, we’ll get to the last penny its just desserts. On the other hand, clearly, we can’t kill the goose. 40% appears to me to be reasonable. I make the point again that it is difficult because we don’t have all the information but 40% on the basis of what the Prime Minister has said, appears to be reasonable and I think we therefore are obliged certainly to give support to the whole notion of what is taking place this morning and at least putatively to the rate of the tax that is imposed.”
Hon. Johnny Briceno, Minister of Natural Resources
“I certainly want to congratulate the Leader of the Opposition on taking I think this position, a progress position. Thank you sir. Because as we have always been saying as day one that it is a new industry, it has taken us over fifty years before we could have found a small field. But it is of such national importance that we have to ensure that we make the right decisions. As I mentioned at one time, when the general populace, everybody, got excited about it and felt that we should go after the maximum amount of taxation, we need to be careful as the Leader of the Opposition mentioned, and also the Prime Minister, we need to give this industry an opportunity for it to grow. As I mentioned once, we can decide that we want three quarters of a small fish or half of a huge fish.”
Hon. Michael Finnegan, UDP Mesop. Rep.
“And if we find more crude oil, and in vast quantities, then we might be able to get into the refinery process. If we get into the refinery process, how healthy that will be because we will be able to alleviate the country of this huge oil price at the tank, at the gas pump, when you get to the gas pump. So let us be positive.”
And while representatives on both sides of the floor were busy throwing bouquets at each other, we stick to our line that the government promised that the tax would fetch 50% of revenue, which we take to mean 50% of the gross and, as we've proven by working the numbers provided by government's advisor Dr. Ram, this tax captures far less than that.
And if you're keeping track of the revenue split; it's like this: at the end of June, BNE had grossed US$20 million from sales of light sweet crude from Spanish Lookout. As of today, government has collected $3,645,084. Income tax is payable at the end of the year. We could not reach the BNE principals for comment on the House's passage of the 40% income tax. It is expected to be approved by the Senate next week and then signed into law.
