Prime Minister and Minister of Finance Dean Barrow tabled a bill in the House of Representatives on Friday to amend the common external tariffs for beverages such as soft drinks and beer from CARICOM, including Jamaica’s Red Stripe beer and Heineken, distributed by several Caribbean countries, among them Trinidad and Tobago.
Barrow noted that the Government imposes Revenue Replacement Duty (RRD) on imports to make them more expensive than local products, and removing it has varied repercussions for local producers, as in some instances, the price of some imported Caribbean drinks should fall, putting them more in the reach of Belizean consumers.
“I’m no believer in free trade, but we’re all caught up in a movement that we simply cannot avoid,” Barrow commented in speaking of the tax amendments at the House.
He said he was giving into pressure from CARICOM partners to become compliant with the Treaty of Chaguaramas – an agreement first made in 1973 and revised in 2001, which establishes the CARICOM Single Market and Economy (CSME) for member states.
“You’re signatories to the Treaty of Chaguaramas; you’re members of the CCJ [Caribbean Court of Justice] for at least the original jurisdiction…we are going to take you to court, and we are going to ask for damages against you unless you, in fact, extend the equal treatment to our products,” Barrow said Jamaica has threatened.
He said Belize is “obliged to give equal treatment to CARICOM imports,” but because Jamaica is a more developed country (MDC) and Belize a less developed country (LDC), Belize can impose a countervailing duty – a 70% duty on the CIF (cost, insurance, freight) value of the Jamaican imports – to offset the loss of revenue.
The amount, said Barrow, would still be less than the duty GOB is now compelled to take off the Red Stripe and other Jamaican products, so the net effect would still be a fall in prices for products from Jamaica.
The situation would be different for the Heineken brand, however, because Government would not be able to levy the 70% duty on CIF for that product, because St. Lucia, the country from which the product is imported, is classified along with Belize as a LDC, Barrow said.
On the other hand, there would be a gain for Belize for rum, said Barrow, because the RRD that imported rum pays is less than the excise tax that rum exporter Travellers pays, and so Government can put a corresponding tax on rum imports.
As a result, the price of rum from CARICOM would go up, so Belize gets “a little break there,” Barrow added.
Also included in the revisions are mineral water, beverages with cocoa or malt, as well as stout and tafia – a low-grade Caribbean rum from sugarcane.
Another matter raised in Friday’s House meeting has to do with how Government’s CARICOM obligations relate to the structure of Belize’s court system.
Prime Minister Barrow also tabled proposals in the National Assembly to change the Belize Constitution to oust the jurisdiction of the Privy Council and give the Caribbean Court of Justice (CCJ) powers as Belize’s final appellate court, to allow Belizeans with dual nationality to become members of the Senate or the House of Representatives, and to allow for the appointment of an Attorney General who does not have to be a parliamentarian.
“The time appears to have come to replace the Privy Council with the CCJ,” Barrow said, offering a brief apology for why his party did not support the CCJ bill while in Opposition.
Speaking on the controversial dual citizenship provision of the bill, he commented that the provision in the Constitution is “contradictory, inconsistent and discriminatory,” because while the laws of Belize recognize dual citizenship, and the Governor-General, who holds the highest office in the land, can hold dual citizenship, the law prohibits National Assembly members from retaining a second nationality.
The clause is an impairment of the rights of Belizeans who have acquired other nationalities, the Prime Minister argued.
The bill to amend the Constitution would be taken to the people and would go through its requisite 90-day waiting period before it goes back to the House for its second reading, he told the House.
The much-debated amendments to the Income and Business Tax Act were tabled at today’s sitting of the House, as well. However, the bill has been sent to the Finance and Economic Development Committee, which is expected to report back to the House after hearing the public’s views on the proposed changes, namely, a change in the business tax rate for casinos from 15% to 8%, and the scrapping of tax on commissions and royalties for non-residents.
Barrow said that since casinos actually had been paying only 4% business tax, the real effect of the amendment was to double the tax rate.
The House adjourned with quite a bit of unfinished business. However, there was closure on the US$20 million loan motion for financing from the Republic of China on Taiwan to bridge the budget gap.
Barrow said the contractual letter is dated May 5, and the Taiwanese have already signed. He argued that the motion should be passed in the sitting because “this is money the Government wants to get quickly,” since the next payment on the billion-dollar super bond is due. That motion will be handed up to the Senate for debate on Tuesday, June 23, 2009.
At Friday’s House Sitting, Prime Minister Barrow tabled two sessional papers: the 2007 Annual Report of the Development Finance Corporation, and a special report of the Auditor General into the 2007 Venezuelan Grant Program.
While the House had a heavy agenda Friday, it was not short of its usual theatrics and mud-slinging across the floor over who was involved in criminal behavior.
Friday’s House meeting came to a rambunctious end with contention between the ruling party and the Opposition, fueled by allegations of corruption at the Karl Heusner Memorial Hospital.
Speaking on adjournment, Opposition Leader Johnny Briceño took the government to task over the healthcare system and particularly about the crisis at the Karl Heusner Memorial Hospital, weaving in commentary over a number of other issues, such as taxation and fuel prices, and taking a few stabs back at Deputy Prime Minister Gaspar Vega, who, very early in the meeting, laid out charges against Briceño of selling off and leasing a series of cayes in protected areas while he held the natural resources, environment and lands portfolios.
Things came to a head when Prime Minister Dean Barrow demanded an apology from Opposition Leader Briceño for charges he made against Vega’s family.
“I will not apologize,” Briceño retorted, challenging authorities to kick him out of the House.
In retaliation, Vega fired back at Briceño by rehashing his father’s past.
Briceño was not booted from the House, even though he ignored a request from the Speaker of the House, Emil Arguelles, to apologize.