June 21, 2016 in Regional

antigua pm-1Sandals Resorts International (SRI) has threatened all “necessary legal steps” to protect its name from what it termed “highly defamatory allegations” made by Prime Minister Gaston Browne when he charged that the Sandals Grande Resort regularly “pocketed” Antigua & Barbuda Sales Tax (ABST) revenue.

In a June 18 letter from Sandals Grande Resort’s in-house attorney, Dmitri Singh, SRI categorically denied the prime minister’s claim that “taxes collected on (the government’s) behalf are diverted… to the pockets of a private company (SRI)”.

Browne made the charges in a June 17 letter to the SRI Chairman, Gordon “Butch” Stewart – a letter to which Singh has now responded. “It is simply not true – it does not now and has never occurred,” Singh declared.

According to both the government and SRI, an agreement was made in 2009 which waived 65 per cent of the 12.5 per cent ABST rate that Sandals Grande was required to charge on its rooms, ultimately allowing it to provide cheaper all-inclusive rates to its guests.

In his June 17 letter to Stewart, Browne alleged that Sandals Grande was billing and collecting the complete 12.5 per cent ABST rate from guests, but was “keeping 65 per cent of the yield (out of the 12.5 per cent)”. He accused the hotel of turning over only 35 per cent of the yield to the government.

“It is impossible for my government to accept that taxes collected on its behalf are diverted, by an unlawful agreement, to the pockets of a private company,” Browne declared. However, Singh, on behalf of the Sandals Grande has said, “In no circumstance did we operate a system of charging ABST at a higher rate and accounting to the government at a lower (rate).”

The lawyer said that guests are billed ABST at the concession rate (35 per cent of the total 12.5 per cent ABST rate) and that the full amounts collected are turned over to the government. Singh argued that,

“… Our accounts at Sandals… have been audited by internationally recognised accounting firms,” and raised the question, “How could they possibly account for the 65 per cent of ABST that you have accused us of retaining for our benefit?”

Singh declared, “We are regularly audited by the government’s own tax department and the practice… could not have occurred in the face of such audits.”

SRI also took issue with Browne’s statement that, “Sandals Resort… pays zero taxes into the government treasury, and will do so for 25 additional years…” Singh responded, “That is a grossly irresponsible and incendiary statement which… has no factual basis.”