Friday, 24 May 2019 11:55 GMT
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Turks and Caicos opposition leader claims Sandals tax debt is $164 million not $26 million




(MENAFN - Caribbean News Now) By Youri Kemp
Caribbean News Now associate managing editor

PROVIDENCIALES, TCI – While the current Sharlene Cartwright-Robinson-led government in the Turks and Caicos Islands (TCI) has been praised by some members of the public for potentially bringing a resolution to a 22-year outstanding tax dispute with Sandals Resorts International, the largest hotelier in the TCI, the leader of the opposition, Washington Misick, has now claimed that the amount of unpaid taxes owed to the government by Sandals is in fact more than six times the $26 million figure generally referred to.

Misick, who is also the newly elected leader of the opposition Progressive National Party (PNP), took to local radio as a guest on The Breakfast Club Show (TBCS) with his new party chairman, Calvin Green, to level several allegations against Premier Cartwright-Robinson and her government.

Amongst the litany of scorching assertions against the premier, Misick has alleged that the Peoples Democratic Movement ((PDM) government is in bed with Sandals and its owner, Gordon ‘Butch' Stewart. The allegation was made during the interview when Misick told listeners, 'There is a perception, rightly or wrongly that the current government has a very, very, close relationship to Stewart, one that is perhaps beyond just pure business.'

Misick was not slow to get to the big issues surrounding the Sandals tax dispute as a central topic and made allegations of malfeasance against the premier and minister of finance Cartwright-Robinson, claiming that she was disingenuous when she made it appear that she discovered the matter.

Misick also alleged that she was not telling the truth and has hidden details from the public. Reading from an audit report that he had in his possession, Misick reeled off the figures discovered by the audit team at the government's Revenue Control Unit, which falls under the portfolio of the premier as minister of finance.

Misick said that the true debt owed to the people of the TCI in uncollected revenue from the Sandals Beaches TCI property was massive and that the all-inclusive resort still owed US$15 million from 2014, US$17 million from 2015 and US$12 million from 2016 and, when added to the penalty for unpaid taxes, the total at 2018 stood at US$164 million.

Opposition Leader Washington Misick (bottom left) recently appeared with PNP Chairman Calvin Green on the Breakfast Show with host Omega

Beaches TCI announced earlier in the year that it would be temporarily closing its Providenciales property in January 2021 — a move widely perceived as an attempt to pressure the government into granting it a tax amnesty — a tactic it has attempted to use in other Caribbean islands.

Alarm bells were set off by the ministry of finance audit team when it audited the resort from August 2016 to April 2017. The premier noted in Parliament that her audit team requested copies of a purported tax concession agreement between the government and Beaches TCI, which Sandals claimed permitted it to pay only 60 percent of the accommodation tax.

Cartwright-Robinson said, 'No agreement could be found; however, Beaches has been operating off a 'gentleman's agreement' from their inception in TCI' at the rate of 60 percent of the accommodation tax rate.

This 22-year-old ‘gentleman's agreement', Misick said, was, 'Totally illegal since only Parliament can agree on tax matters.'

The audit team in 2017 searched for the alleged agreement but could not find such an agreement in the government's files. However, a letter surfaced during the amnesty debate for Beaches insinuating that Misick in 2014, as then finance minister, agreed to permit Beaches to pay accommodation tax at the rate of the alleged ‘gentleman's agreement'.

Misick said that, since he demitted office, 'The audit team decided to go and find this agreement and didn't find it and then a decision by revenue control to push for legal resolution' was made.

Misick said that, before he demitted office, his PNP government's finance ministry was investigating the matter. However, before the investigation concluded, the election occurred and he could not resolve the matter since his party (PNP) lost the election.

Misick said, 'It supersedes politics and it goes to the legal branches of government. It's the executive, the legislative, and the judiciary. So, essentially it bounced over to the judiciary, and the attorney general has no option but to report the matter to the director of public prosecution. So, it's not that the politicians are behind pushing it, they would wish that it never happened.'

Misick also accused the premier of a cover up and said that now that the tax dispute is a legal matter, there is nothing that she (Cartwright-Robinson) could do about it.

Beaches has denied owing any outstanding tax and has launched a lawsuit against the government for over payment of taxes based on levying the tax on children under 12 and remitting these sums to government when they were not collectable.

"In January 2019 we filed suit against the government in relation to these matters and also claiming certain tax refunds. We wish to make it very clear that the alleged unpaid tax of US$26,708,618 plus interest at 213% per annum, arose because the TCI government, having entered into binding host country agreement(s) with Beaches to encourage our expansion of the hotel, undertook a tax audit and although finding no violation of our agreement unilaterally and without warning imposed back taxes in breach of the host country agreement and other written assurances given by the TCI governments," Beaches said in a statement.

"It is indeed most unfortunate that we had to litigate against our host country, but given the injustice we had no alternative. Based on the number of communications that our organization has been receiving, it is clear that the investment and banking community together with the travel trade including the airlines are all paying close attention to see whether the government will honor its commitments," the resort added.

This last comment is also being taken a thinly-veiled threat to harm the British territory's crucial tourism industry if Sandals does not get its way.

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Turks and Caicos opposition leader claims Sandals tax debt is $164 million not $26 million

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