Tue | Aug 14, 2018

Letter of the Day | Review waiver powers over bauxite

Published:Monday | March 6, 2017 | 12:00 AM


I write in respect of the recent discussion in Parliament on the waiver or proposed waiver of the bauxite production levy payable by the north coast exporter of unrefined bauxite to the United States.

I wish to make three observations.

One is to say, perchance there is any doubt about it, it is the minister responsible for finance, not the minister responsible for mining or even the prime minister, who Parliament has empowered in Section 6 of the Bauxite Production Levy Act to "waive, remit or refund" levy payable or paid by bauxite companies.

Two, having settled this question, I am of the view, following a 2013 case before the Caribbean Court of Justice, BBC Holdings Limited and The Belize Bank Limited (appellants) and the Attorney General of Belize (respondent), the Attorney General's Department should carefully examine whether the Bauxite Production Levy Act, impliedly or explicitly, empowers the minister to waive the levy payable for a number of years in the future, or, to take it to the extreme, forever.

Three, I think it imprudent, for any number of reasons, including the fact that bauxite is a non-renewable resource (unlike agricultural lands, for example; has low value-added at this most basic of the aluminium production chain; and the country's dire need for a royalty only of US$1.25 per tonne and hoped-for profit-sharing.

While comparisons are sometimes invidious because, among other things, time and circumstances do change, it is worth reflecting that when Norman Manley negotiated a massive increase in tax from the companies exporting the unrefined bauxite 50 years ago this year, the amount of the tax was, in nominal terms, US$1.54 (plus a small royalty of about US$0.25) per tonne!