New income tax placed on oil exploration companies
It has been a matter of controversy almost from the day oil was first discovered in Spanish Lookout less than a year ago. That is, how the ever increasing revenues would be shared between the company and the government. Today the question has finally been answered, as the House of Representatives approved legislation to levy a special income tax on petroleum companies.
Prime Minister Said Musa
?The present bill exempts the companies engaged in oil exploration from business tax and imposes an income tax rate of forty percent of the chargeable income. This will bring the petroleum legislation in Belize in line with that of other oil producing countries.?
?Taken together it is estimated that Belize will receive as much as fifty percent of revenue from the oil companies. Madam Speaker, it would be apparent from what I?ve said, that the rate of income tax for oil companies should not be taken in isolation. Other fiscal parameters already mentioned, such as price sensitive production share arrangements could take care of government?s interest, when windfall profits occur and protect the operators when crude prices fall. Currently we have only production rate sensitive arrangements, efforts will be pursued to have price sensitive scales as well.?
?Other methods of increasing Belize?s share of revenues will include greater levels of government and Belizean shareholders in terms of percentages in the capital stock of the oil companies. In conclusion Madam Speaker, I should mention that our overriding objective in presenting this bill is to ensure that the legislative framework that is put in place for the petroleum industry is fair and balanced to encourage oil exploration, as well as ensure a just return for Belizeans from this new industry.?
