Why the head tax is split $4-$3

This week, the Government of Belize explained why it would return $4.00 out of the $7.00 in head tax, to be collected from the Harvest Caye project, back to Norwegian Cruise Lines. 

CEO in the Ministry of Trade, Investor Promotion, Private Sector Development and Consumer Protection, Hon. Michael Singh, explained Wednesday at a press conference in Belize City that the $4-$3 split is to give NCL a chance to recover its investment over the 25-year exclusive concession.

Singh explained that in a number of countries where the head tax is higher, the governments of those countries invested the capital for the construction of the port; however, in Belize, NCL has agreed to invest no less than US$50 million on the project.

Singh explained that some countries have a head tax as high as $60, while others have none at all, and went on to say that those numbers are the extremes with the average being around $8.20.

The Memorandum of Understanding between GOB and NCL allows for an increase of not more than $1 in the head tax every five years.

Minister of Labour, Local Government, Rural Development and National Emergency Management, Hon. Godwin Hulse, confirmed that NCL and GOB would split any marginal increase to the head tax 50/50.

Hulse also said that GOB is still undecided on how the $3 will be distributed, as it intends to use a different remuneration method for the south than it uses for the head tax collected in northern Belize.

Hulse, along with the Belize Tourism Board, has stated that the MOU is not legally binding, but is a show of good faith between GOB and NCL of their commitment to the project.

Hulse also explained that the MOU in its current form is the sixth draft and, while no major changes are expected, the agreement will be further negotiated.

Notable is the fact that the $4-$3 split has survived previous drafts of the MOU, and with the signing on July 31, it appears to be a permanent fixture in the agreement.

The split has caused several stakeholders to speak out against the arrangement, including the Belize Tourism Industry Association (BTIA), which equated GOB with a “crack head looking for a hit” after analyzing one of the previous drafts of the MOU.

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