Belize Bank Victorious in Court Against G.O.B.
Eamon Courtenay
In another matter recently before the Supreme Court, Justice Courtney Abel also ruled in favor of the Belize Bank. He struck out a section of the Income Tax and Business Tax Act which required all businesses to pay their taxes in full before challenging the assessment. The decision followed an evaluation in which the bank was being charged thirty million dollars in taxes and other fines by Commissioner of Income Tax Kent Clare in June 2013. With the striking out of that portion of the law, businesses can now challenge their assessments before paying taxes. In this case, it was also found that the initial assessment of thirty million dollars was overestimated. According to Courtenay, who also represents the Belize Bank, the assessment has been reduced to nine million dollars.
Eamon Courtenay, Attorney for Belize Bank
“What the commissioner was claiming was over thirty million dollars from the Belize Bank, back taxes and the bank disputed the liability to those taxes. What the judge ruled importantly was that, first of all, the thirty million dollars was not the correct amount. That’s the first thing. Secondly, the question arose as to what is the proper procedure under the Income and Business Tax Act if the commissioner assesses you to tax, whether it be one dollar, a million dollars or ten million dollars, if you dispute that assessment you cannot have it reviewed or appealed unless you pay the tax. So many businesses around Belize have been assessed by the Income Tax Department for business tax, for example, a hundred thousand, two hundred thousand and they can’t pay. Because they can’t pay they have to enter into an agreement with the commissioner to pay in installments. They want to challenge it but they can’t challenge it because what the income tax says is that you have to pay all the taxes before you can challenge it. Very importantly, Justice Abel ruled that that is unconstitutional. That is a denial of access to an appellate procedure provided by the statute to insist that you pay all and therefore he struck out the provision of the act that says that you have to pay all the taxes before you can seek a review or appeal. So that provision is no longer in the Income and Business Tax Act and I can just mention that, as a matter of interest, that we are representing another client and we are challenging a similar provision in the Sales Tax Act. Under the Sales Tax Act you have to pay fifty percent and we have a client who is challenging that.”
Isani Cayetano
“Now what does that mean for the Belize Bank, in terms of having this part of the law struck out?”
Eamon Courtenay
“Well, in so far as the Belize Bank is concerned the claim against it was for thirty million dollars in taxes and penalties and the judge ended up ruling that they should only pay nine million. The bank is considering its options and so in so far as the bank wanting to challenge that amount before the commissioner or to seek a review of it before the commissioner it can do so directly without first having to pay it.”
The effect of the decision by the Supreme Court is that other businesses are already challenging the act.
