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Government amends Income and Business Tax Act

Following that moment of silence, it was back to regular parliamentary session at the House. The Government introduced four bills, three of which it pushed through all stages for approval. The bills centered on taxes, particularly as it pertains to amendments to laws 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. At today’s sitting, the first bill tabled was the income and business tax amendment bill. Prime Minister Dean Barrow explained that the Government received the final bill only yesterday, adding that it was urgent to have it go through all its stages forthwith to avoid blacklisting.

Rt.Hon.Dean Barrow, Prime Minister: The reason for the rush is that this is a consequence of the pressures, not to put too fine a point on it, that have been brought to bear on our jurisdiction by the industrialized countries and in this case in particular by the EU and by the OECD. In it’s analysis of information on areas of tax transparency, fair taxation and implementation of anti base erosion and profit sharing measures the so called ‘Code of Conduct group’ which is really an agency of the aforementioned OECD/EU axis, that group found that Belize’s Export Processing Zone and our International Business Companies Regimes are both considered to be carrying out harmful tax practices. You know we introduced at the last sitting a designated processing areas bills which sets up a regime to replace the EPZ regime; again all as a consequence of what these people abroad are insisting on. Their review of the EPZ act, which as I said is to be replaced by the DPA, in their review the EU cited the following that ‘the twenty year exemption from income and business tax with an option to extend for a further period, the losses incurred in the tax holiday period being carried forward for offset against profits for a period of five years following the tax holiday, imports into and exports from an EPZ enterprise being exempt from customs duties and similar taxes, proceeds from the sale of stock or other complete ownership interests in an EPZ enterprise not being subject to any tax on capital gains’; all this they found together with discretionary clauses such as the section 131 in which an international business company may elect to be excepted from taxes under the income and business tax act, all this they said obliged us to ‘amend the income and business tax act to as they put it ”remove these harmful tax subsidies” and put Belize in a place where according to them there will be a ‘level playing field in our tax system’. Now what members have before them is the product of a feverish round of activities in which there were consultations with every possible interested stakeholder. We don’t have much of a choice. The blacklisting with which we are threatened is not just a matter of imposing punitive measures with respect to our exports to Europe and in various other ways. As the banks tell us as the Central Bank tells us, that blacklisting if it were to happen will actually make correspondent banking relations or continued correspondent banking relations difficult if not impossible. So again I very humbly crave the indulgence of the Leader.

The Opposition received a copy of the bill this morning and expressed concern, requesting time to review the bill. The bill will be forwarded to the Senate.