Opposition says millions lost in Fortis deal

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Updated: September 2, 2015

The Electricity Acquisition Settlement Act includes exemptions that will be afforded to the Fortis Companies. According to the act, quote, “Notwithstanding anything to the contrary contained in the Income and Business Tax Act, the Exchange Control Regulations Act and Regulations made thereunder, the Stamp Duties Act or any other law, rule, regulation, order or instrument whatsoever, the exemptions from taxes, duties, fees and imposts and exchange control requirements shall vest in the Fortis Companies and shall have effect in Belize commencing from the date of the Deed of Settlement and continuing for so long as the Fortis Shareholder remains a shareholder in BEL”, end of quote. Cayo South Area Representative, Julius Espat, believes that this is the reason why a settlement could have been reached and says that while Fortis will be exempted from several taxes, the Belize people will lose millions of dollars.

Julius Espat – Area representative, Cayo South

“Fortis and their lawyers you think that what the member from Mesop said that they are in such love with the Prime Minister that they came back to make a deal these are international companies that know how to make money. They have come back because they know that they have a deal that is beneficial to them and they have seen this government as fools to facilitate it for them. But wait Mr. Speaker it gets better. Fortis will now be exempted from all taxes including withholding taxes and which by the way deprives the people of Belize of approximately half a million dollars a year just the withholding tax and now Mr. Speaker we come to the real reason as to why this one sided deal was agreed to by Fortis, by our so called patriotic and nationalistic Prime Minister, the real reason why the attorneys for Fortis and Fortis came down to bamboozle our Prime Minister and such bamboozle the people of Belize. Well you see Mr. Speaker it goes into what is in the act itself and it goes to the extent of the exemptions. I will read this part and it’s “First Schedule Section 3 extent of the exceptions: The Fortis Companies (and any transferee of the shares) shall be exempt from all taxes imposed on dividends and distributions paid, A; by BEL to the Fortis Shareholders or its transferee.” So what that is telling us now and they made it clear is that after this agreement is signed Fortis can now transfer their shares to BECOL and you have to understand BECOL is this mega monster. What we are talking about here about $70 million and $150 million is insignificant to the amount of money that Becol generates and what they represent. Mr. Speaker we buy 60% of our power from Becol and just by them having this exemption on taxes alone you are talking that the Belizean people will be deprived of hundreds and hundreds of millions of dollars and that is why Fortis and their attorneys agreed to the Prime Minister’s presentation it is not because they love him, it is because they have fooled him. It is because he is in bed with the agreement and that he and his brothers can make money from the settlement and Fortis takes homes hundreds and hundreds of millions of dollars.”

Those were some very strong words that Espat had for the Prime Minister and of course when afforded the opportunity, the Prime Minister responded.

Prime Minister Dean Barrow

“Mr. Speaker in his intervention he was rude, disrespectful, he was venomous, he was vulgar, he was reptilian and in the normal course this would illicit something in similar vein from me but I don’t know if it’s because I am getting wiser as I get older, I don’t know if it’s because I can’t stand for as long as I used to but bottom line is I will not treat with the member for Cayo South except to say this, a long time ago and I really ought to have employed it in the case of the member for Cayo South before now. A long time ago I heard somebody say “never wrestle with a pig” because you both get dirty but the pig likes it. So you who don’t like it can’t win. So last words to the member for Cayo South Mr. Pig I refuse to join you in the mud.”

While the PM would not respond directly to Espat’s point in regards to the exemptions that has been afforded to Fortis, he did went on to read that when the People’s United Party was in power, they exempted Fortis from taxes as well.

Prime Minister Dean Barrow

“The law was never changed but your government sir perhaps illegally certainly outwit the law sent to Fortis on June 8th 2000 the following letter. Mr.Lyn Young CEO Belize Electricity Limited. Dear Mr. Young; and this was written by Mrs. Davis who was the acting financial secretary in your administration 2000. I write to confirm that dividend payments made by Belize Electricity Limited to its shareholders are exempt from the 15% withholding tax requirement. This exemption is in compliance with the provisions of the prospectus. So you, the member for Fort George, the Member for Freetown make a big deal about the fact that we are saying now as a matter of law that there is to be no tax on the dividends but we are only saying what you in fact prescribed, what you implemented but without the benefit of law. I don’t know and I imagine that’s why Fortis wants to see it now as part of the law I don’t know that your government had any authority to do this but this is what it did and ever since in practice this has been honored so it’s not just Fortis, it is SSB and it is the small shareholders in BEL. Their dividends from this time of June 8th 2000 letter given by your government their dividends have never attracted a withholding tax.”