And while the controversial aquaculture bill is on the backburner, the 40% income tax for petroleum companies is finally going to be passed by the House. It had already been approved in August, but the Senate, with the backing of government senator Eamon Courtenay, blocked its passage into law. Now, after some tweaking, the Senate is sending it back to the House for approval, the Prime Minister told us what the changes are and we asked him what it means for the taxpaying public.
Rt. Hon. Said Musa,
"What we are proceeding with on Friday is what the House passed together with the two amendments made by the Senate which is to in effect insist that payment be made in U.S. currency as well as the retroactivity of the tax going back to the beginning of the year."
Jules Vasquez,
Sir but isn't it so much has been made that it is the property of Belizeans, it is the patrimony of Belizeans?
Rt. Hon. Said Musa,
"I don't intend to get into a debate on this issue. Let's wait until the House meets on Friday."
Jules Vasquez,
Sir but I am just trying to hold your own government to its words. That is what your government has said.
Rt. Hon. Said Musa,
"I am convinced that the government will be able to get, as I said from the very beginning, our objective was to get at least a fifty percent take on the oil resource."
Jules Vasquez,
The take of the revenue of the gross?
Rt. Hon. Said Musa,
"The 50% is based on the net earnings."
Jules Vasquez,
You said 50% of revenues and now you are saying 50% of the profits."
Rt. Hon. Said Musa,
"I said 50% take and all people in the oil industry will tell you what 50% take means, it is exactly what I am saying."
Well we're not sure exactly what he's saying because back in June this is what the Prime Minister said, revenue, not take.
Rt. Hon. Said Musa,
[June 12, 2006] "It is estimated that Belize will receive as much as 50% of revenues from the oil companies."
And while the revenue refers to gross earnings, the PM says it doesn't make sense to have such a fuss over what he considers a small quantity of oil.
Rt. Hon. Said Musa,
"Let's not get carried away. We are talking about a very small infantile industry at this stage, 2,500 barrels a day. That is about it."
Jules Vasquez,
But sir these people have revenues of $84 million as at the end of October.
Rt. Hon. Said Musa,
"Well that is where the technicians will have to do their assessment as to how much of that is part of the expense of the cost of bringing out the oil from the ground and then from that, whatever are the legitimate expenses, those are deducted, and then the government will get its 40% tax based on that, based on whatever is the balance. The numbers that were revealed in the House as what was received so far is only the royalty. It doesn't include anything else. In order words we've haven't collected the tax yet because taxes are not due yet."
Again, that's not quite what he said in the National Assembly on August 25th:
Rt. Hon. Said Musa,
[August 25th 2006] "The amount collected as revenue to government from petroleum operations so far include sums collected as business tax, sales tax, general sales tax, and royalties."
At the end of August, figures disclosed by the Prime Minister in the House show that the royalty paid was $2.6 million, and sales and business tax added up to another million.
