At today’s almost two hour long press conference, much of the time was spent discussing government’s various legal entanglements with Ashcroft controlled entities and interests. There’s the battle with the Belize Bank to recover the US$10 million in Venezuelan grant funds, the Money Laundering Act charges against the bank, and the non payment of business tax by BTL. And while all have a story of seemingly infinite complexity, the one that caught our attention was the BTL business tax case.
As we’ve reported since January, BTL has been withholding payments of business tax. That’s about $1.5 million a month. Something like that would mean jail for regular folks but BTL has a so called accommodation agreement with government allowing them to do. It was signed secretly by the past government in 2005, guaranteeing a rate of return – and giving the company authorization to withhold taxes whenever that return is not realized. Well now, that unrealized figure stands at $18 million and today Barrow discussed the mess that the last government signed its way into.
Hon. Dean Barrow,
“Under that accommodation agreement, the past administration provided for these people to be guaranteed a rate of return and the agreement said if there was any difference between the guaranteed rate of return and the achieved rate of return, government would pay the difference. That agreement was made in 2005 and as soon as the first year of operations, after the date of the agreement was completed, BTL went and said the achieved rate of return is less than the guaranteed rate of return by $7 million and the fool fool government at the time, instead of saying man look yah, and there is no effort made to check the figures, check the formulae, it is just on faith.
They said, ‘we can’t pay it now, can you roll it over until next year and we will give you some additional agreement of comfort to enshrine the fact that we do owe you.’ And BTKL said fine and then the next year which was 2007, they came back and said that not only do you owe us the $7 million, there is an additional $11 million shortfall for the 2007 year, so you owe us $18 million and you either pay us or, and that is when government did a third supplemental agreement, to say well if we can’t pay you, and obviously we can’t pay you, you can simply withhold any tax, it is not just business tax, any tax at all that you pay – you can simply withhold that until you say the accounts are now squared and in fact government no longer owes us the $18 million.”
Adele Ramos, Amandala
“Doesn’t the current administration have the authority to immediately deal with these matters rather than negotiating, what is there to negotiate?”
Hon. Dean Barrow,
“Because Adele, your last government also signed on to these commitments that if there is any dispute, you go to arbitration in the UK. We have taken the formal position, we do not accept the validity of that agreement. I can tell you that will remain our position throughout. There must be some other way to resolve it because we are not going to pay any $11 million and we’re never going to accept that anybody had any authority to tell BTL you can withhold your taxes.”
Though the last government agreed to keep the accommodation agreement confidential, with the new Freedom of Information Act which ban secrecy clauses soon to be made into law, it is expected to be released sometime soon. In related news, government, has re-instituted charges against BTL for another two months of non payment of business tax.
