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Mar 30, 2010

Senator Hulse says Business tax will see increased electricity costs

As we told you earlier Senator Godwin Hulse did not support the budget in line with the position taken by the Belize Chamber of Commerce. When he took the floor he also spoke specifically about the Income and Business Tax amendment and the effect on electricity generation.  In his view, the BELCOGEN, the power generation company owned by Belize Sugar Industry would be crippled while still in its infancy.  And even power generated by Belize Electricity Limited would eventually see an increase in production costs because of the amendments. According to Senator Hulse, the business community had not been consulted.

Godwin Hulse

Godwin Hulse

Godwin Hulse, Senator

“But Madam President, we can’t up the price that we are going to sell the electricity to B.E.L. because that is fixed by a power purchase agreement and it is also guaranteed and controlled by the P.U.C. But more fundamentally, we feel that the government’s intention to do this could have resulted in some discourse. Pick up the phone and invited some members of BSI to a meeting. Communicate with the private sector actors that will be affected, see what our contribution could be. When we look at this, we feel now that why bother? Why bother to make the investment when we are charged from the time our contention runs out now with six point five percent of tax. We have horizon a brink quarrel possible with cane farmers who feel that they have a right to share in the baggash and all the other attendant problems and we are pressured by banks to keep it extremely tight. I feel the communication with the stake holders would have been the way to go and I know we will say it many times today. But back in 2005 there was also forced communication with the government on the budget. This new government came to office and voluntarily carried out these consultations two years ina  row and we looked forward to them this year and of course, they was no consultation. We simply heard that this tax will be imposed. By 2016 of us, the first full year would require that BELCOGEN definitely seek a tariff increase of approximately point zero one, one cents per kilowatts in its tariff and for other generating sources that are linked to petroleum, it is going to be worst for them. In already difficult economy where the recovery is not yet on the horizon I am sure one doesn’t want to contemplate increasing electricity rates. With the proposed increase in business tax, a height in electricity rates is unavoidable and definitely inevitable. Madam President, I have been asked by the business community that I represent to say that they cannot at this time support this amendment and indeed would wish that government would post haste, consult with the sector and seek to make different adjustments and finally word coming out of the other power produces seem rather strong but rather accurate as they have sent me information to say that they feel that the sector has been unfairly  targeted and singled out for this increase in tariff and that indeed it may limit future expansions and investment plans.”

In the case of receipts of entities providing electricity of 6.5 percent we must object. ..gov.  had difficulty collecting corporate income tax…business tax was a way to get money

OUT   00:09:56 up front.

IN      00:13:00 In the Prime minister’s speech, he said that the increase of business tax for supply of electricity is projected to be ten million. On perceived ability to pay is. Legislation does not say, only 6.5

OUT   00:13:41 percent on your receipts.

IN      00:11:09 In the case of of electricity…PUC..I speak to belcogen..1 controlled n regulated by puc that sees all its numbers… it is not up, the margins are relatively small, I speak to that company first

OUT   00:11:54 because I’m intimately associated with its evolution.

IN      00:15:12 But madam president we can’t up the price that we are going to sell the electricity we are going to sell to BEL, guaranteed by PUC. Gov. could have some discourse, pick up the phone and invite BSI to a meeting. Communicate with private sector actors that will be …when we look at this we feel now why bother to make the investment, now we’re charged with 6.5 percent. A brewing quarrel possible with cane farmers who want share in bagash, pressured by banks to keep it tight. Communication would have been the way to go voluntarily had consultations …two years in a row and we look forward to these consultations and this year. This year there was no consultations and

OUT   00;16:56 we simply heard that his tax will be imposed.

IN      00:17:43 BY 2016 for us Belcogen will need a tariff increase, and for other generating ..

In an already difficult economy where recovery is not on the horizon, one doesn’t want

OUT   00:18:15 to contemplate increased electricity rates.

IN      00:20:05 with the proposed increased in business tax, the height in electricity rates are unavoidable and definitely inevitable. Madam  president I have been asked by business community to say that they cannot at this time support this amendment, and indeed we wish that  gov. consult with

sector and make adjustments. ..sector unfairly targeted and singled out for this increase

OUT   00:21:05 in tariff, it will limit future expansion and investment plans.”

Senator Hulse also read a letter from the Chamber of Commerce which indicated that even Belize Electricity limited will suffer from an increased tax burden. The budget was passed late this afternoon.

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Viewers please note: This Internet newscast is a verbatim transcript of our evening television newscast. Where speakers use Kriol, we attempt to faithfully reproduce the quotes using a standard spelling system.

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