13 months ago, the Government nationalized the International Merchant Marine Registry of Belize, known as Immarbe and the International Companies, or IBC Registry. They were taken from their previous owner, the Ashcroft-Allied Belize International Services Limited, known as BISL.
IMMARBE sold the Belizean Flag as a flag of convenience to international vessels, while the IBC Registry, registered offshore companies which are given tax-free status and assured secrecy in their corporate affairs.
During that nationalization, the Government assessed BISL and determined that it owed 30 million dollars in back taxes which Government claims were not paid by BISL over the last 20 years.
After a year in court, the BISL finally managed to get its hearing fully heard before Justice Shona Griffith. Outside of court, their attorney, Eamon Courtenay explained to us that his main argument is that the Government is seeking to unlawfully use the tax code as a weapon against his clients:
Eamon Courtenay. Attorney for Belize International Services Limited
"This case was a challenge to that. Basically the argument was that Belize International Services Limited is an IBC and an IBC is not subject to tax and if you're not subject to tax then the commissioner cannot tax the company. Their argument was that the Belize International Services Limited was carrying on business with persons resident in Belize and therefore it lost its tax-free status, but it was very clear that Section 130 of the Act makes it that even if you lose your status that you are not liable to tax, and we were very clear to the court that there is no evidence that the company had lost its status as an IBC and therefore it continued to enjoy the benefit of a tax concession."
Daniel Ortiz
"How does this affect the case where the government acquired the companies, does it affect it in any way the challenge?"
Eamon Courtenay
"No this is a different one. That other case which is another case before Justice Arana, the company is seeking compensation from the government for the unlawful acquisition. I think it is no mystery, this is not the first time that the government has done this. What it does is it takes people's property, and then it manufactures a false tax assessment and tries to set off whatever they owe against it. It has to be seen for what it is and the government should stop using the tax code as a weapon against persons whose property it has taken."
Daniel Ortiz
"If the court rules in your favour what are your clients seeking?"
Eamon Courtenay
"In this particular case that the tax assessments for 30 million dollars are null and void, unlawful and unconstitutional - they will be struck down."
Daniel Ortiz
"Sir we know that your clients have claim that they are unable to pay this money, this tax. Is it the same position?"
Eamon Courtenay
"Oh yes, absolutely. The company's only income was for managing the registries and the government has taken away that source of income. We cannot pay it."
The Government was represented by the Deputy Solicitor General Nigel Hawke. Justice Shona Griffith has reserved judgment for September 16, or an earlier date to be announced.
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