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    August 18

  • 04:06 AM

Sandals seeks to clear air regarding withholding taxes

CMC,

Added 17 September 2018

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CASTRIES – Sandals Resorts International (SRI), which has hotel properties in several Caribbean countries, Monday, said it had taken note of “sustained efforts” by parties including an opposition political party, to try and tarnish its reputation.

SRI said that these parties were continuing to misrepresent the issue of an EC$24 million withholding tax claim by the Inland Revenue Department in St Lucia on insurance costs.

SRI insists that the matter was “finally and appropriately resolved” in 2017.

In a statement outlining what it termed “these are the facts” the Jamaica-based operator of all-inclusive resorts for couples in the Caribbean, said it had objected to these assessments in accordance with its statutory rights under the Income Tax Act.

It said it has consistently maintained, in correspondence and discussions with Inland Revenue and the Ministry of Finance that the assessments were not justified and were incorrectly determined, and so should be withdrawn.

“Let us repeat that, the assessments were not justified but were incorrectly determined and should have been withdrawn. SRI’s objections were based on professional advice on this matter, and a legal ruling in 2011 by the OECS Supreme Court that is relevant to withholding tax assessments in St Lucia.”

SRI said that it is also important to note that US$15 million or over 62 per cent of the claim was in penalties and interest after it was allowed to continue to drag out by the former administration in spite of the court ruling and in spite of assurances that were given to the company’s financial representatives Grant Thorton.

SRI said that the senior partner in Grant Thornton, Richard Peterkin, met with the then prime minister Dr Kenny Anthony on two occasions prior to the last general elections to discuss concessions relating to a proposed 150-room expansion at Sandals Grande.

“The issue of the Withholding tax assessments was specifically raised and despite assurances from the then Prime Minister and Deputy Prime Minister that the matter would be addressed; there was no communication from Government to Inland Revenue, which continued to accumulate significant interest on the old Assessments. It is important to indicate that there were never any legal efforts to collect these taxes claimed to be due,’ SRI said.

Efforts to contact Anthony have so far proven futile, but in the statement SRI said that since he knew of the “circumstances surrounding this matter, it is very unfortunate that members of his party are among those being allowed to consistently misrepresent this issue to the public of St Lucia.

“Sandals never and does not owe the government of St Lucia any outstanding money. Rather this dispute with Inland Revenue over withholding taxes on insurance premiums was an old and exceptional matter that required resolution if SRI was to be able to finance new investments on the island. Indeed the only purpose served by delaying it was to have derailed the expansion works that were planned for the Sandals Grande Saint Lucian.”

SRI said that the resolution last year “has now allowed us to proceed with plans to invest close to US$250 million in a new hotel . . . which will provide 1 000 construction jobs over two years and over 600 full time jobs when finished for the people of St Lucia, not to mention the many farmers, taxi drivers, tour operators, vendors etc. Who will benefit from the additional activity”.

It said that in spite of continued efforts to distort this issue, with the apparent intention of causing harm to Sandals Resorts and its 1 800 team members, “We wish to assure both our team members and the people of Saint Lucia that Sandals Resorts remains a true friend and partner who this year celebrated its 25th anniversary in St Lucia.

“We assure you further that the Sandals Resorts in Saint Lucia – as we are in all territories – is fully compliant with all taxes, statutory deductions and payments in line with the concessions granted to us, and which have been similarly granted to many hotels in St Lucia. (CMC)

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