Wednesday, March 18, 2015. AARON HUMES Reporting: In separate rulings issued recently, the Supreme Court advanced the case of Belize International Services Limited (BISL) against the Government of Belize over the takeover of the International Business Companies Registry (IBC) and International Merchant Marine Registry (IMMARBE) in June of 2013 and released the Belize Bank Limited from taxes owed to Government.
Earlier in October of 2014, Justice Shona Griffith had ruled that assessments of $30 million in taxes owed under the IBC Act and assessed by Commissioner of Income Tax Kent Clare against BISL were unlawful because the IBC Act exempts BISL and there was no indication that it lost its status as an IBC.
She further ruled that alleged violations of the Act charged by the Government, specifically carrying on business with Belizeans against the law, is not a condition for losing IBC status.
Finally she ruled that Commissioner Clare did not have the jurisdiction to make the assessment.
The decision removed a major hurdle from the company as it seeks the return of its property, in a concurrent claim which was heard later in October before Justice Michelle Arana.
There, some US$60 million is being claimed in damages, but attorney for BISL, Senior Counsel Eamon Courtenay, says that the Griffith decision removed an option for the Government to offset any possible damages against the allegedly unpaid taxes.
The Government countered the second claim by applying for a strike-out.
Justice Arana on Friday denied that request and set trial for July for a hearing of the case to consider its full merits.
According to Senior Counsel Courtenay, the judge was concerned enough about what she heard of the takeover of BISL operations that she felt it was necessary to have the matter heard in open court.
The Belize Bank challenged an assessment of $30 million in a situation similar to BISL’s: it was made to pay the amount under the Income and Business Tax Act before filing a challenge to the decision.
Justice Courtney Abel ruled that the provision of the Act relating to “pay to play”, as it is informally called, is unconstitutional and struck it off the books, meaning businesses can now challenge their payments without having to shell out monies they may not have.
Justice Griffith had declined to consider similar provisions in the IBC Act in the earlier BISL case.
Justice Abel also ruled that the Bank’s assessment was overestimated and in fact it owed only $9 million.
Courtenay says the Bank is considering its options but is relieved to no longer be under the burden of having to find money to pay the assessment before being able to challenge it.
A challenge to similar provisions in the Sales Tax Act is being separately challenged.
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