Telemedia responds to P.M. on accommodation agreement & more
The Government has been at odds with Telemedia since the U.D.P. administration took office in February 2008. Top among the issues, is an accommodation agreement between the government and the utility company signed in 2005. Telemedia contends that the agreement, which had provisions for a fifteen percent rate of return, is valid. Prime Minister Dean Barrow, however, thinks otherwise. The two companies have since been entrenched in legal battles… and last week a bombshell was dropped when it was let loose that government’s latest tactic is to amend in the Business Tax Act to increase taxes on phone companies which would result in Telemedia paying about two-thirds of its profits over to G.O.B. The P.M. discussed this when he appeared today on Krem’s Wake Up Belize morning show. He also revealed that when approached by Digicell, G.O.B. suggested to them, to buy out B.T.L. This evening General Manager of Business Development Karen Bevans responded to the comments as well as the impending tax increase and the accommodation agreement.
Karen Bevans, Karen Bevans, General Mgr., Business Dev., Telemedia
“To say we are into antiquated and museum piece type technology and so forth. No, no, no, that is extremely depressing and insulting. We are one of the most up-to-date companies in the region. We have state of the art, modern telecommunications equipment, we have highly skilled and trained employees, we have continuously been reducing rates for the Belizean people and that ahs been going on for the past seven years and there were plans to continue.”
“That will impact us negatively. What has been said in the local media is that there are plans to maybe increasing the tax to about twenty-five percent. Now even currently, paying nineteen percent is already one of the highest in the region when it comes to telecommunication taxes. Moving to twenty-five percent would at least put two-thirds of our profit in taxes. Remember now, we are paying taxes in gross, so it is into our profits when we look at managing twenty-five percent. So definitely that would impact us negatively. We would definitely have to look at the way we do things, cost cutting measures, maybe increasing rates. I just told you about reducing rates; we have been reducing rates for the past seven years. Can we sustain that? Impacting the number of employees, we would be able to manage our operating costs at current levels. So we would have to look at the way we do things. We offer free internet to schools, that’s a cost. So we would have to look at that. So the amount we give back to the community, over a million dollars per annum, all of that we will have to re-look at.”
“As far as we are concerned, it is a valid agreement since 2005 we have that agreement between the government of Belize and Telemedia and pretty soon the Arbitration Court in London will be hearing of all the breaches done by the current government and making a decision on it. But as far as we are concerned, it’s a valid agreement since 2005. In fact, we have been adhering and keeping up with our part of the agreement. We have been installing our rural network, for example, we have installed internet to all schools. So we are maintaining our commitments and we would expect that the same would happen on the other side. We have been making attempts to dialogue with the government and with no sauces to date, of course. But we will continue to try. I think getting into a situation with one of the largest companies in Belize and the government is not the best thing, it’s very counterproductive, especially at a time when we have an increase in crime, the state of the economy, we have a flood situation on hand. So it’s not the best way to go but we are hoping it will all work out in the longer run.”
Barrow says that Business Tax Act amendments should go to the House on December fourteenth.
