House passes amended tax bill
It was once the party of big business, the last rampart protecting the merchant elite from the unwashed hordes of P.U.P. rabble. How times have changed. Today the United Democratic Party completed its electoral makeover, casting itself as the best friend of the working class by cutting employee taxes and shifting the burden to the businesses that employ them. The venue for today’s performance was the House of Representatives in Belmopan and the script was the final passage of amended income tax and business tax legislation. News Five’s Stewart Krohn reports.
Dean Barrow, Deputy Prime Minister
“As a consequence of those amendments we have as near perfect a bill as the work of man can ever achieve. Anything better than this would be godly.”
If God has an opinion on the new tax law, he or she isn’t talking. But those mortals doing business here on the ground may not be too pleased.
The amendments eased the pain for a few particular industries but by and large the new business tax is fundamentally unchanged in concept from its original version. That is: profits are out and gross revenues are in.
The basic tax for most businesses remains at one point five percent, although newspapers, radio stations and broadcast television stations will be assessed at half that rate as will domestic airline companies. Other winners were banks, which saw their rate drop from fifteen percent to twelve and inexplicably the most profitable company in the country, B.T.L., which will now pay only twenty two percent of gross instead of twenty-five. Other refinements will benefit foreign owned companies, which were in danger of losing U.S. tax set offs. They will continue to pay the old thirty five percent corporate tax in order to qualify under U.S. law, but if it turns out that the new business tax is higher, they will pay the additional difference. Fuel dealers got to take excise and R.R.D. out of their equation and tourism businesses will not have to pay tax room tax, VAT and money they receive simply as agents. The receipts from export processing zones will not be taxed and the Minister of Finance will have the discretion to waive the tax on new businesses for two years or five years in the case of citrus and other agricultural operations.
Charitable donations were recognized but only slightly, as gifts of between five hundred and twenty thousand dollars will be deductible from the gross, thus realizing only a one point five percent incentive to be charitable, instead of the previous thirty five percent incentive.
But the hardest hit segment of the business community, and those for whom no relief is in sight, are those firms who continue to operate at a loss or those with substantial losses to carry forward. For these hard pressed operators the choice will be between raising prices, cutting expenses or simply going out of business.
But in the House today the mood was decidedly upbeat, with no opposition to slow down the debate the government side, backed by a packed House of supporters, had a field day.
Manuel Esquivel, Prime Minister
“I am not surprised they are not here this morning Mr. Speaker, because in the end they could find nothing to criticize and so all they could come here to do this morning was to scare the Belizean people any more. But you see they do not do that in this House because in this House the Belizean public can hear our response to these scare tactics. So they do not come here with their scare tactics and since that is the only tactic that they have in regards to this bill they do not bother to come any at all Mr. Speaker. How ironic that these new found champions of big business find themselves in a peculiar position that they cannot oppose this bill but they cannot support it because they have already been bought and paid for by certain big businesses.”
But it turned out that Prime Minister Manuel Esquivel was only the warm up act for the main event, it was left to Deputy P.M. Dean Barrow to lambaste the absent opposition in a style that gathered its inspiration from sources as diverse as Shakespeare and the Bible.
Dean Barrow
“And obviously the opposition doesn’t have the courage; it is the most cowardly and despicable thing to lie on the bill but when you have a chance to come and debate it like men and women in the full view of the Belizean people you put your tail between your legs and you slink away.”
As for the effect of the new tax on prices Barrow donned the unfamiliar tunic of a radical economist.
Dean Barrow
“I am here to tell the Amandala and to tell the People’s United Party that there will be no inflation. There will be no inflation as a result of the market forces, but there also will be no inflation because the government is prepared to legislate to see that there will be no inflation.”
And to make sure the audience had no doubt as to his new found resolve, Barrow uttered words that must have been borrowed from Assad Shoman in the 60’s.
Dean Barrow
“What we have made sure is that we have pleased the vast majority of the citizens of this country including the business community. The only ones that are displeased are those members of the business community who were committed to continuing their Shylock like policies.
But let me get back to the banks Mr. Speaker. We heard again that the banks would raise interest rates on their loans, the banks would increase their service charges. The Right Honorable the Prime Minister sat with the banks and as a consequence of the dialogue we can guarantee that there will be no increase in interest rates.”
And finally the populist economist again switched hats, back to that of the politician, hinting that election day may be further away than we think.
Dean Barrow
“I don’t know what the Right Honorable the Prime Minister will do but since the P.U.P. di seh dehn wah elections ina June, which they will not have, but now they are saying well the negatives effects of the giveaway to the masses of the people will have a downside and we will see… If I was the Prime Minister I would call elections at the last possible day so that the Belizean people can see that the proof of the pudding is eating and that every Belizean is benefiting.”
Stewart Krohn for News Five.
