Light at the End of a Tunnel
ZOLITUR is coming. But when? And what will this really mean?

December 1st, 2007
by Thomas Tomczyk

[private]

Selling goods by the Coxen Hole cruise ship dock.

Selling goods by the Coxen Hole cruise ship dock.

One year after putting his signature on ZOLITUR, Bay Islands’ Freeport status, on December 13, President Mel Zelaya is expected to hold an open town meeting. This date should mark the beginning of the duty and importation tax-exempt laws taking effect.

Application for ZOLITUR tax-exempt status is expected to become available in December and Cynthia Solomon, executive director of ZOLITUR, is preparing for a rush of applicants. While the two page application is simple enough to fill out, it is the 13 documents required with the application that could prove difficult for some businesses to comply with. Alongside environmental permits, RTNs, etc., ZOLITUR is creating a document that could evaluate the economic and migration impact of each applicant. While the law is generous enough to consider just about any business tourism related, “by no means do we guarantee that a business will receive a permit,” says Solomon.

One of the biggest delays came from conducting a census that began when it should have been ending. While eventually the census was completed in all four municipalities, entry and tabulation of data is still underway. At this point, no one knows how many people live in the department, their education level, or amongst other data, their ownership of firearms.

The year long wait has frustrated many businesspeople. “You could feel the slowdown in investment. Many people are waiting for what will happen,” said Solomon. One reason for the slowdown is Roatan Municipal moratorium on issuing business licenses for individuals and businesses that are not already on the island. For the last 18 months the stack of applications has grown. “We have to be vigilant of the businesses from the mainland who try to relocate here as a tax shelter,” said Solomon.

An “I’ll believe it when it happens” attitude about the Freeport status has permeated Bay Island businessmen. Despite assurances from ZOLITUR officials, politicians and businessmen, several Freeport deadlines were already broken and many business people remain skeptical about the efficacy of the changes being implemented. “It will take another three years to make this happen,” says Shawn Hyde, general manager of Mariscos Hybur.

While the bylaws should have been submitted to Tegucigalpa in April, “In all fairness the process started in mid July,” said Solomon. While the import duty bylaws are significant, there are at least three other bylaws that need to go through the same process. Making ZOLITUR fully functional will really take another year or two. Bylaws concerning migration control, security and environment protection are yet to be written. The process for these ZOLITUR bylaws will start all over again: meetings, drafting the bylaws, submitting them to Tegucigalpa for review, publishing them in La Gazeta and applying them in the Freeport zone.

The Secretary of Finances has had only a few changes to the 24-page duty bylaws document. To reduce the chances of the bylaws being completely rewritten by the finance ministry, the ZOLITUR commission invited ministry representatives to be involved from the beginning. According to Solomon the four-person staff of ZOLITUR, working out of their offices in French Harbour’s Jared Hynds Community Center, follow the application with phone calls and relentless querying of officials involved in moving the process and paperwork forward.

Further delays are likely as some bylaws, for example the gun carry laws, will require changing the national Honduran laws. The national gun carry permits will have to be adjusted to say “valid in all Honduras except for ZOLITUR zones.” Cayos Cochinos, while part of Bay Islands is not part of ZOLITUR.

Still, some aspects of the laws are already being implemented. The $1 and $2 visitor fees of persons traveling to the Bay Islands are currently only collected on the Utila Princess and Guanaja’s Bimini Breeze. The Galaxy Wave and airlines flying to the Bay Islands have yet to implement the fee that goes to the Ministry of Finances and is eventually released to ZOLITUR. [/private]

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