The Government of Belize is repealing and replacing the Export Processing Zone (EPZ) program. The program was intended to attract local and foreign investments in Belize by offering import and export duty exemptions and other tax exemptions. The program has, however, been identified as being in violation of the Agreement on Subsidies and Countervailing Measures (ASCM) of the World Trade Organization and Belize, being a signatory to the WTO, must comply with its regulations. Today, the Designated Processing Areas Bill, 2018 was introduced in the House to repeal the Act. Acting Minister of Trade and Commerce Tracy Taeger Panton and the Prime Minister explained the way forward to be in compliance.
Honorable Tracy Panton: “I wish to clarify that the repealing of the existing EPZ Act and replacing it with the designated Processing Areas Bill of 2018 has become necessary to ensure Belize’s compliance on subsidy travailing measures. Removing the Export Contingency Subsidy and replaced it with more relevant filters that uses standards as a recognized benchmark for industry development as well as to meet our obligations to the European Union as it relates to the EU’s code of conduct on harmful tax practices that seeks to maximise efforts to prevent tax fraud and tax evasion.
Honorable Prime Minister Dean Barrow: “We are trying to make sure that as the Minister explained the new regime will while getting us away from the threat of sanctions if we simply continued with the EPZ will not prejudice our current EPZ entities and so we are filling around with our tax law to try to offer them the same kind of taxation relief. The minster wasn’t here on Tuesday, we discussed it in Cabinet, her technical person came explained all this to us and we then left him to get together with Solicitor General to draft the companion amendments to the Income Tax Legislation that would compliment and support this. We never had a chance in Cabinet to see that bill but we nevertheless had it listed. When the Financial Secretary saw it he almost had a heart attack, he felt that the drafting instructions resulted unwittingly in two large concessions, well more than a concession, it was going way beyond the situation that currently exists tax wise that we we wanted to restore. It has in fact providing for some serious extension so I didn’t get a chance to talk to Minster, I hurriedly had to tell the Clerk to please withdraw that bill but I want to assure Minster, Members and the EPZ public that when this comes back for debate on second and third readings, at the same time there will be the Companion Tax piece that we can hopefully pass all at once to help to give them the additional comfort that they need.