Home Headlines Senate questions sections of Income and Business Tax amendment Bill

Senate questions sections of Income and Business Tax amendment Bill

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The Senate proceeded to debate the Income and Business Tax (Amendment) bill. The amendment became necessary as government seeks to comply with pressures brought upon the Government by the European Union and principally, the Organization for Economic Co-operation and Development, OECD. This is an intergovernmental economic organization with 36 member countries. Over the years, Belize has committed to cooperate with the OECD to address harmful tax practices and the transparency of its tax and regulatory systems. The Senators also questioned the legislation.

Senator Mark Lizarraga: “Section 4 four subsection A, sub section B, sub section 1. It said the rates for tax of international business companies will be as follows: 1.75% of the chargeable income amounting to a sum greater than $3,000,000 Bz. Well the first question is and it’s a very serious question is what is the definition of chargeable income because this piece of legislation has no definition of chargeable income and chargeable income Mr. President basically means taxable income but is this a taxable income on sales or profits because while the rates are aligned of those with business tax which is calculated on gross sales, the impression I am getting from many in the field, in the industry so to speak is that the intent is for it to be on net profit, big difference. I would like some clarity because whether you are going to charge the rate on your net profit or on your gross receipts it’s completely different. It’s not the same, I am not talking about the choice, I am talking about the rate. Why is it that you are penalizing people if 3% of their sales are less than $3,000,000 and then the bigger company that have more sales that have more than $3,000,000 is only paying 1.75. How is that progressive, how is that encouraging small companies? How are you encouraging more employment so why penalize the smaller operations? That is our question. What is the definition of chargeable income? Why was it not included?”

Senator Aldo Salazar: “The fact that chargeable income is not defined in this is nothing, is of no consequence. You don’t need to define chargeable income here, chargeable income is defined in the act itself so how you determine what you are going to tax is based on what the Act says, based on what chargeable income is, that is how you determine what you are going to tax, you apply the rate that is in the amendment to chargeable income, I don’t understand what the big deal is. Chargeable income means all your income and you determine the chargeable income just like any company that operates in Belize does. The chargeable income is the same for an IBC now as it is for a regular company. The definition is the same, there is nothing being changed, I don’t understand what the big deal is.”

all bills were passed.

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