Published On: Thu, Jun 23rd, 2016

Antigua-Barbuda PM goes head-to-head with Sandals

Gaston-Browne1ST JOHN’S - Prime minister of Antigua and Barbuda, Gaston Browne, has responded in a forthright manner to media reports of comments by officials representing Sandals Resorts International on the issue of his government’s intention to address the retention of a portion of Antigua and Barbuda sales tax (ABST) by Sandals.

According to Browne, a 2009 arrangement between Sandals and the previous United Progressive Party (UPP) administration violates the laws of Antigua and Barbuda and deprives the treasury in excess of $15 million, a practice that is unjust to the people of Antigua and Barbuda.

In a letter on Tuesday to Sandals' general counsel Dimitri Singh, Browne also pointed out that the Jamaica Observer newspaper, the owner of which also happens to be the owner of Sandals, Gordon 'Butch' Stewart, is being used by Sandals to attack and intimidate the Antigua and Barbuda government.

Referring to a letter dated June 18, 2016, to Browne from Sandals, which was published by the Observer even before it had been received by the prime minister, he said he very much regretted that this discussion was taking place in the public domain.

"It would have been more constructive and productive had your company not sought to politicise this matter, and, instead, opted for a dialogue that could result in an equitable agreement that would be fair to your company and the people of Antigua and Barbuda," Browne said in his response.

He noted that Sandals had asked the government to make no further public statements, and it agreed to respect that request.

"As it happens, your company’s choice was to dishonour its own request and to escalate the politicisation of the matter, including by organising the publication of your letter to me of 18 June 2016 BEFORE it was received by my office," Browne pointed out.

In response to an apparently bizarre claim by Sandals that the Antigua and Barbuda prime minister had defamed the company, Browne said that neither the threat contained in Sandals' letter to him nor the misleading headline in the Jamaica Observer newspaper has unsettled him or his government.

"If it is your company’s wish to sue me for the content of my letter of 17 June 2016 written to Mr Stewart laying out the legitimate concerns of my government in relation to the [ABST], which is the rightful asset of the people of Antigua and Barbuda, please be assured that my government would welcome the opportunity since it would call for full disclosure of the company’s financial dealings, including monies collected and retained abroad," Browne said.

In its letter to Browne dated 18 June, Sandals claimed that the company has not retained a significant portion of the ABST that it has a legal obligation to collect and remit to the treasury.

However, this assertion by Sandals has been contradicted by the present leader of the UPP, Harold Lovell, who was a senior member of the UPP administration at the time and who publicly stated on June 20, 2016, that his government made an agreement with the company "to grant the remission of a portion of the ABST to Sandals".

In his public statement, Lovell stated unequivocally that the "discount" of the ABST to Sandals, given in 2009, would be 68% between July 2007 to 31 December 2014 (remarkably, Browne noted, it was backdated by two years); and 60% between 2015 and 2022.

"Indeed, this is precisely what has been wrongfully occurring. And, it is that blatant and wrongful practice that my government seeks to correct," Browne said, adding, "I also make it clear that, in defending and advancing the interests of the people of Antigua and Barbuda, my government will not be intimidated or bullied."

Former prime minister of Antigua and Barbuda Lester Bird said in a statement that retention of any portion of the ABST by Sandals is wrong in law, and unjust to the people of Antigua and Barbuda.

"The ABST is not money earned by Sandals. It is a government sales tax on goods and services that is paid by every person, company and organisation," he pointed out.

Bird noted that the ABST is used by the government to provide services and amenities to the entire population, including health services, education, protection from crime and maintenance and provision of infrastructure such as roads and schools.

"When a company is allowed to keep what is essentially state revenue, that company augments its income at the expense of the people. That cannot be right; and it is not right," he said.

Meanwhile, the resort group has also come in for harsh criticism in Barbados, where Sandals negotiated a 25-year tax holiday on all import duties and levies, including VAT on the importation or local purchase of all capital goods -- including hotel equipment, furniture, fixtures, vehicles, and computer equipment.

Barbados also granted a 25-year tax holiday on all food, alcohol and beverages imported or bought locally by the resort.

During the recent budget debate in the Barbados House of Assembly, opposition MP Ronald Toppin described the resort "a state within a state" and called on the government to make public its agreement with Sandals.



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