Roatan’s Beauty, Truth & Wisdom

Eleven Years of ZOLITUR

As an ambulance makes its way across Dixon Cove creek, a worker lays out the path of the road leading to the site of the new Roatan Public Hospital in Dixon Cove. The road is to be paid with ZOLITUR funds.

The Bay Islands Organization Is Focusing on Brick and Mortar Projects

When the ZOLITUR [Bay Islands Tourist Freezone] law was signed on Roatan by president Zelaya on December 13, 2007, the president of Congress and soon-to-be de-facto president, Roberto Micheletti said “I’ve never heard Roatanians sing the anthem so enthusiastically.”Indeed Rotarians and Bay Islanders had high hopes for the new legal entity.

“They have the money, they have the technology, they have the plans,” said Romeo Silvestri, ex Bay Islands congressman, speaking about ZOLITUR. “They would be perfect to supervise the development of Roatan. They need to make a strategic alliance with the Municipality and the patronatos.” Since its inception ZOLITUR has focused its funds on brick-and-mortar infrastructure development projects.

However, the past decade brought mostly confusion, anxiety, and a handful of mostly symbolic projects. Evans McNab, who took over direction of ZOLITUR in March of 2015 following Cynthia Solomon and Ricky Marin, overlooks 26 technical and administrative employees at their offices in French Harbour. “I’ve had employees who have been harassing businesses saying: ‘I will report you to the fiscalia.’,” says Evans McNab about the ZOLITUR administration he took over.“ZOLITUR was portraying an image of a white elephant and not doing what it was meant to do,” said McNab. All that is changing.

Last year ZOLITUR paid Lps.6 million for the construction of the Roatan new police headquarters in Los Fuertes built on the property confiscated after the 2014 arrest of Lobo “El Negro” Aleman, a cocaine trafficker for Colombia’s Los Mellos de Kasandra. In 2019, ZOLOTUR’s largest funding initiatives are the paving of the road to the Roatan hospital under construction in Dixon Cove, construction of a public dock in Saint Helena island, and connecting homes in the Coxen Hole neighborhood of Palos Altos to municipal sewer line.

ZOLITUR will complete 11 years of existence in December 2018 and on December 31, the 366 companies that enjoy the ZOLITUR tax exempt status have to renew their licenses. According to McNab, by the end of October barely half had done so. Why? “That is a good question. Maybe they no longer are active, or physically here,” says McNab. If you don’t have a ZOLITUR license you can purchase an already existing one. The going price is $40,000-$100,000. “Most people just see ZOLITUR for their tax exempt status, but it’s much more than that,” says Silvestri. “Doing business on Roatan is already difficult and costly so having ZOLITUR gives us an opportunity to remain competitive,” said Annie Jones, an islander who’s furniture business recently began using ZOLITUR. “It [ZOLITUR] works, but it is a flawed system because it is not handled with the time frame necessary for good business practices.”

The ZOLITUR budget is Lps. 50 million [$2 million] a year, and according to McNab, 65%-70% of it goes towards projects. This number pales in comparison to what Bay Islands bring in taxes to the central government in Tegucigalpa, “Bay Islands bring the central government a yearly income of Lps. 600 Million [$25 million] in sale tax revenue alone,” says Silvestri. ZOLITUR’s budget is gathered a dollar at a time, from tourists. Eighty percent of it comes from the $2 per passenger fee collected from tourists arriving at Mahogany Bay Cruise Terminal and from the capital gains fees from property sales. The airport fees of $6 per international passenger and $1 per national passenger and the $1 fee for passengers arriving by ferry provide the remaining revenue. The proposal of charging visitors arriving at the Port of Roatan $2 per passenger to help fund ZOLITUR has never been resolved.

Things are much better than they were eight-ten years ago. Back then all funds from the fees were transferred to Tegucigalpa and a portion was disbursed back to the Bay Islands under pressure from the local government representatives. “The [central] government kept 50% of the money [in the first few years],” says McNab. “There was a perception in Tegucigalpa that businesses were using their tax exempt status to import to the island and sell on the mainland,” says McNab. Nothing was ever proven, but an unsuccessful presidential executive order demanding that ZOLITUR be shut down was issued by Pepe Lobo. Since ZOLITUR was established by an act of congress, it would need an act of congress to be dissolved and that, according to McNab, is unlikely.

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