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Apr 17, 2008

… And announces new windfall profits tax on oil

With oil prices hitting one hundred and fifteen U.S. dollars per barrel and the record high cost of imported fuels wreaking havoc on Belize’s economy, the P.M. earlier this week announced that he will be seeking some compensation in the form of a windfall profits tax on Belize’s domestic oil production—at this point consisting solely of Belize Natural Energy’s three thousand barrel per day field at Spanish Lookout. This morning he defended the revenue enhancing proposal as a logical response to today’s economic realities.

Prime Minister Dean Barrow
“Because the price of oil is so high, the price of oil on the world markets and because B.N.E. is making such a killing as a result of the high prices, we feel that the society, the government and people of Belize ought to get some share of the additional profits that the company is reaping as a consequence pf this tremendous spike in oil prices. Exactly how the tax will work, at what stage it will kick in and how much it will be, these are matter still to be worked out. But we are going to sit with the B.N.E. after we have had our advice from our experts as to the proposals that we ought to make and we are going to try to agree with B.N.E. what is fair to the Belizean people and what is fair to them.”

Kendra Griffith
“But doesn’t government naturally receive an increase in money because you take a share of their profits?”

Prime Minister Dean Barrow
“Yes, that is so but we feel that where there are these extraordinary circumstances, where the price of oil has risen so steeply, it is fair that government gets something in addition to the natural increase that comes by way of the income tax.”

Barrow said the additional revenues would help government’s poverty alleviation efforts and could possibly include subsidies to bring down the soaring cost of imported food.


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