Resolution Expected on Zolitur
Mayor Expects Duty-Free Benefits to be Retained without Restrictions

August 20th, 2013

[private]Roatan Mayor Julio Galindo said he expected a decision to come from Tegucigalpa in late August that would retain the preferential tax scheme for the Bay Islands known as ZOLITUR without significant new limitations or restrictions.

“I’m hoping that we will have that within a week,” Galindo said August 20.

Marco Ramiro Lobo, head of the national commission on review of tax exemptions, listened to concerns of island businesses at a June 13 forum.

Marco Ramiro Lobo, head of the national commission on review of tax exemptions, listened to concerns of island businesses at a June 13 forum.

As reported previously (see July Voice), a presidential commission has been reviewing the Tourism Free Zone for the Bay Islands (ZOLITUR) together with all other Honduran tax-exemption schemes since January, and benefits have been effectively suspended for most beneficiaries in the interim. However, sources reported in August that many beneficiaries were once again receiving the dispensas needed to import goods duty-free.

“People are starting to bring in their stuff,” said Galindo.

Galindo said he raised ZOLITUR with President Porfirio (Pepe) Lobo before the monthly Honduran cabinet meeting at the Port of Roatan July 30. Then, he said, he and some advisers went to Tegucigalpa and met with the whole commission that is reviewing the tax exemptions at the Presidential Palace in early August.

“They were trying to show us that there was a bunch of stuff on the list that was exonerated that they didn’t think should be so,” Galindo said. “Booze was one of them. Jewelry was one of them. And they had this lady that just went off on us, saying, ‘Why should somebody buy a jacket in Roatan? It’s so warm there.’ And then the other member who was complaining about the booze, apparently he was a preacher. So this was the kind of stuff we were up against.”

The problem, he said, was that the members of the commission “don’t know what they’re talking about.” He added that some had a clear anti-business bias.

Galindo said he explained to the commissioners that people arrive on Roatan on cruise ships from cold countries like Canada. “They come down, they see a jacket, they buy it. … I go on a lot of trips. And if there’s not good shopping there, my wife don’t want to go. It’s just that simple.”

“There are duty-free stores all over the world,” Galindo said he explained to the commissioners. “You go in the airports, what’s the big seller out there? Isn’t it jewlrey? Isn’t it booze? Finally, I think they started to get the picture.”

However, he said, “at first they were saying, ‘Well, how about if they buy it, and then they get it on board the ship?’ And I said, ‘No, because we got another 100,000 tourists that stay here for a week (arriving via airlines).’”

Finally, said the Mayor, “They got together and they came to a conclusion that they were going to eliminate that stupid idea of not allowing this and that and the other.” He said he was “hoping” to have a “full resolution” within the next week. He said he expected the commission would also drop its recommendation to limit ZOLITUR benefits to five years.

“The only thing that we have is this little incentive. And if we lose it, we lose it all,” Galindo said he told the commission.

Galindo acknowledged “there have been some big abuses” of the ZOLITUR law, but he said the solution was to punish and cancel the licenses of the abusers, not to eliminate the incentive and “punish all of us in the process.” He further acknowledged there were inequities in the scheme that needed to be addressed.

“Zolitur has been attacked by the local people, and when you look at it, they’re right,” said the Mayor. “We don’t have the guy on the street getting the benefits out of this law.”[/private]

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