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Nov 3, 2006

Government seeking to overhaul petroleum taxation

Story PictureWhile Johnny Briceño addressed the soldiers in his role as Deputy Prime Minister, he put on his Minister of Natural Resources hat to comment on the oil situation. Viewers may recall that several months ago government raised the income tax on profits from petroleum exploration from twenty-five to forty percent. At the time the directors of Belize Natural Energy bawled … but with the tax hike temporarily bottled up in the Senate, G.O.B. is looking to enact comprehensive legislation that may make the oil companies nostalgic for the past.

Johnny Briceño, Minister of Natural Resources
?We have to take a complete look at the fiscal regime in Belize when it comes to the petroleum industry. We recognize that the fiscal regime as it stands it is regressive to government meaning that the more profit a company makes the less government and the people of Belize get as a percentage and we need to find a way to correct that. Several weeks ago in the Cabinet we discussed the issue of resource rent tax where in otherwise what we call an additional profit tax. What that does is it looks at the different profitability of the different fields that we have and we would set a rate of return on the companies. And if it say twenty or twenty-five percent whatever rate we would set whenever the company goes beyond the rate of return that has been accepted then they would add what you call an additional profit tax. The advantage of that is that it is a self adjusted mechanism. The more profit that they make the government and people of Belize would be able to get a larger portion or share to be able to keep our just share what we have been saying all along.?

?We believe that shortly we will be able to come out with the exact figures that we would like to present our advisor, Mr. Daniel Dumas from the Commonwealth Secretariat was here last week working with us. We have made several presentations to the income tax department and to the Ministry of Finance. We even met the P.S.A. holders, the companies that are ready to explore in Belize to present to them the issue or idea of introducing what we call an additional profit tax.?

According to Briceño, the petroleum tax situation should be resolved by the end of the year.

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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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