Income tax on petroleum set at 40%
It’s been a sticky point between Belmopan and Belize Natural Energy but tonight the law of the land is that income tax on petroleum products is forty percent of gross profits. The figure was finalized today during a sitting of the House of Representatives in Belmopan. And if only briefly, both sides were in full agreement.
Said Musa, Prime Minister of Belize
?Most of the oil producing countries in the world keep their corporate taxation levels at between thirty-five to forty percent and fifty to fifty-five percent. History has shown that raising the corporate tax on petroleum profits to high levels of say seventy did not only discourage the exploration activities, but brought the production populations to a grinding halt in some countries when world oil market prices fell. In view of these considerations, and with input from a petroleum financial consultant from Trinidad and Tobago, an income tax of forty percent on petroleum profits was considered fair and reasonable both for the oil companies and the government and the state of Belize. Madam Speaker, we have come a long way from the first unsuccessful well drilled by Gulf Oil Company in 1956 near the Spanish Lookout area as a matter of fact, to the present successful wells drilled by B.N.E. in the same area half a century later. But this only a beginning, and with the grace of God, and with the missionary zeal of pioneers, like the late Mike Usher, we can expect larger oil finds in our rich Belizean soil. And I would urge all members to support this bill.?
Dean Barrow, Leader of the Opposition
?Forty percent appears to be reasonable. I make the point again Madam Speaker that it is difficult because we don?t have all the information. Forty percent on the basis of what the prime minister has said appears to be reasonable. And I think therefore, we certainly are obliged to give support to the whole notion of what is taking place this morning and putatively to the rate of tax that?s imposed. We can support or at least I can what is happening here today on condition that that further legislation will address comprehensively the entire spectrum of considerations that are attached to this industry will be forthcoming in the immediate future.?
John Briceño, Deputy Prime Minister
?We need to give this industry an opportunity for it to grow. As I mentioned once, we need to decide if we want three quarters of a small fish or a half of a huge fish, where we could end up getting even more for Belize.?
Michael Finnegan, Mesopotamia Area Representative
?Oil can get we out of a lot of our economic problems. Oil can get we out of poverty. Madam Speaker, you know in Venezuela is only twenty-seven cents a gallon. That is why I am saying if we find lotta crude oil madam speaker, it would be worth our while to get into the refinery. Let us be positive, let us charge what we fi charge and let the Belizean public benefit from this new industry. If the public benefit, the country will benefit. And I thank you.?
The next step in Belize’s oil industry will be the establishment of a petroleum fund. The Musa administration has pledged to use those monies for education, poverty alleviation and in cases of environmental damage. As for comments from officials at Belize Natural Energy, this afternoon we were told that all the company directors who can speak to the issue are out of the country.
