Belize chief justice dismisses application for injunction under 'accomodation agreements'
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| Published on Tuesday, June 24, 2008 |
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BELMOPAN, Belize: Chief Justice, Dr Abdulai Conteh, has dismissed Belize Telemedia’s application for an injunction to restrain the Government of Belize from continuing or issuing any Judgment Summonses against Belize Telemedia and its subsidiaries, BTL Digicell Ltd and Business Enterprise Systems Ltd, for business tax assessments.
The Chief Justice also awarded costs against Belize Telemedia in the sum of BZ$15,000 payable to the government of Belize.
After an all-day sitting held last Saturday, 21 June, the Chief Justice ruled that on the facts of this case, he was not convinced that he should exercise his discretion to prohibit the revenue authorities from carrying out their statutory duty of collecting taxes.
In its application to the Supreme Court, Belize Telemedia had argued that it was entitled to set off against business tax, the sum of $10.35 million which it claimed was owing to it by the government of Belize under the so-called Accommodation Agreements signed by the previous Administration.
These Agreements had purported to guarantee Belize Telemedia a 15% return on its investment and had further purported to allow Belize Telemedia to offset any shortfall in achieving the 15% return against the business tax and other taxes payable by it.
The Chief Justice said that the issues in the case were not so clear-cut as to warrant his intervention and that it was open to Belize Telemedia to seek relief through the arbitral process agreed by the Parties.
The Chief Justice also expressed his strong disagreement with the order issued by the English High Court restraining the government of Belize from issuing any Judgment Summonses against Belize Telemedia for business tax assessments until the said sum of BZ$10.35 million had been set off in full.
The Chief Justice observed that it was a peremptory order from the court of a foreign country to the authorities of another country, without referring to any arbitral proceedings. He said that the tax laws are territorial in nature and that, in the absence of any treaty or other special arrangement, no foreign court can forbid the revenue authorities of another country from collecting taxes.
The immediate effect of Chief Justice’s ruling is that the Judgment Summonses against Belize Telemedia for business tax assessments for the months of February and March 2008, which are due to be heard before the Magistrate in Belize City on Tuesday, will now go ahead as scheduled. The business tax under these Summonses amounts to $4.5 Million.
The Commissioner of Income Tax has also issued business tax assessments against Belize Telemedia for the months of April and May 2008, amounting to about $4.2 million. Judgment Summonses in respect of these assessments will be issued in due course if the taxes remain unpaid.
The Office of the Prime Minister has welcomed the Chief Justice’s ruling and has reiterated government’s position that it will vigorously pursue every available avenue to collect business tax and other taxes owing from Telemedia, while continuing to maintain that the so-called Accommodation Agreements are illegal, unconstitutional and devoid of any legal effect. | | | | Reads : 281 |
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