London court cites BZ$10,265,423.63as BTL’s claim against GOB as at March, 2008; GOB claims BTL owes $8.7 million in business tax
Tomorrow, Tuesday, BTL goes back to the Magistrate’s Court to answer for two judgment summonses that had been issued for February and March – totaling $4.5 million. Government sources report that BTL has been assessed for a further $4.2 million for April and May, even though judgment summonses are pending.
For the past three months, the Government of Belize (GOB) and Belize Telemedia Limited (BTL) have been at odds over money, and the question over who owes whom has been argued in both the Belize Supreme Court and the High Court of Justice, Commercial Court in London.
Prime Minister Dean Barrow had told the press recently that BTL is claiming $14 million from the Government, and the company contends that it is entitled to withhold taxes until those arrears are cleared, courtesy of an agreement signed secretly by former Prime Minister Said Musa.
The Barrow administration has not accepted the claims made by BTL, and so the Commissioner of Income Tax has issued a series of judgment summonses against BTL, ordering it to pay or face prosecution in the Belize Magistrate’s Court. BTL had to appear in court for $1.5 million in arrears for January, but the Income Tax Commissioner later withdrew charges after BTL sent over a cheque to clear the January arrears.
While GOB and BTL were negotiating to resolve the impasse, BTL went to the High Court of London, where it was successful in getting them to pass an injunction to stop the Government of Belize from issuing any more summonses for back taxes. (The London court injunction cited $10,265,423.63 as the claim of BTL against the Government as at the end of March, 2008.)
The injunction of May 16 went on to say that GOB should take the necessary steps to exempt BTL and its subsidiaries “from any tax, duty, levy or other impost upon goods, materials, equipment and machinery of every type…”
Subsequent to the London court ruling, BTL went to the Supreme Court of Belize to get a parallel injunction, essentially to mirror the London court’s ruling. But even though BTL won in London, GOB scored the victory on its home turf – which means that the London ruling against the Government cannot be enforced.
At the end of a hearing held on Saturday, June 21, however, the Government of Belize scored a victory in the courtroom of Chief Justice, Dr. Abdulai Conteh, when he decided that he could not grant BTL’s request for an injunction against the Government to bar GOB from exercising its tax collection powers on BTL – a company controlled by British mogul Michael Ashcroft. He also ordered BTL to pay the Government $15,000 in costs.
(Attorney Lois Young successfully argued the Government’s case, while Eamon Courtenay was lead counsel for Belize Telemedia Ltd.)
The Chief Justice referred to the order of the London court as egregious. The Government of Belize contended that the English court was “out of order” in trying to shackle their hands from fulfilling their statutory duties of collecting revenue.
BTL had also initially gone to the court to ask the Supreme Court to stop the Government from imposing import duties on the company, until it believes GOB’s arrears are settled. But it later withdrew that portion of the request in the local court.
BTL contends that Government owes them on the basis of a secret accommodation agreement given to the company by former Prime Minister, Said Musa, under the last political administration. News of that agreement, which BTL claims guarantees it a 15% rate of return, came only a few months ago, when there was a change in Government and Barrow replaced Musa as Prime Minister.
BTL threatened Barrow to take legal action against him if he made the agreement public, but Barrow has told our newspaper that Government is taking the position that the accommodation agreement and its later amendments are all illegal, null and void, because Musa had no authority to unilaterally give up tax dollars.
Of note is that BTL went to the CJ’s court on Saturday without disclosing the secret accommodation agreement, but the Chief Justice indicated that he could not make a proper decision without seeing the document in question.
BTL director, Phil Osborne, took the stand and entered the agreement into evidence, but the three subsequent amendments were not disclosed to the court.
We have no indication whether Telemedia will appeal the CJ’s ruling. Efforts to reach their local attorney subsequent to the ruling proved futile.