War Of Words Escalates Between Sandals Resorts And Antigua Prime Minister
PHOTO: In May, Sandals sold Antigua’s Grand Pineapple resort (pictured) to Elite Island Resorts. Company officials are now engaged in a war of words with the country’s’ prime minister over another property, the Sandals Grande Antigua. (Photo by Brian Major).
An increasingly tense war of words erupted this week between officials at all-inclusive resort operator Sandals Resorts International (SRI) and Antigua’s prime minister following the latter’s decision to end a tax agreement brokered through a previous administration.
Gaston Browne, who became Antigua’s prime minister in 2014 as a member of the Antigua Labor Party, recently announced plans to rescind a 2009 agreement under which he said SRI remits 35 percent of the Antigua and Barbuda Sales Tax (ABST), retaining 65 percent of the fee.
The agreement was reached under Antigua’s previous United Progressive Party administration. Browne stated his intent in a letter to SRI officials, who in turn described the tax agreement as legal and binding.
In an article in the Jamaica Observer, which is owned by Sandals' Chairman Gordon "Butch" Stewart, SRI officials said the “potential irreparable damage” created by Browne’s decision “is enormous and we are compelled to take the necessary legal steps to protect our sterling reputation and our brand.”
“In 2009, Sandals Resorts International entered into a valid and binding host country agreement with the government of Antigua and Barbuda,” said SRI officials in a statement provided to TravelPulse.com.
“That host country agreement granted certain tax concessions to Sandals as an inducement for new investment including the expansion of Sandals Grande Antigua. This concession made it legally permissible for Sandals Grande Antigua to bill, collect and remit the sales tax at a reduced rate for the expanded hotel, which it did faithfully, in accordance with the agreement and under government and external oversite.
“It is simply not true and has never been true, that Sandals is billing at the standard rate and remitting at the concessionary rate, and keeping the difference as the Government has asserted,” the statement adds. “Sandals is confident that the matter, in due course, will be clarified in its favor.”
SRI opened Sandals Grande Antigua in 1991. The statement adds company officials are “proud of [SRI’s] tenure in Antigua where it has used the strength of its brand to bring worldwide attention to the destination, employment opportunities second only to the government [and] increased airlift.” SRI paid Antigua $5.2 million in taxes in 2015 and $5.8 million in 2016, said officials.
Browne has in turn challenged SRI officials to meet him in court. “If it is your company’s wish to sue me… please be assured that my government would welcome the opportunity,” the prime minster says in an Antigua Observer report.
A Trinidad & Tobago Guardian article claims SRI “pays no direct taxes to the government treasury, an agreement that extends for another 25 years” and also “pays no taxes on imported capital items, none on food or beverage, and none on items needed for resort improvements.”
In Caribbean media reports an SRI attorney denied the company paid “zero taxes” into Antigua’s treasury and that it has a 25-year agreement. Stewart has previously mentioned tax concessions his company has negotiated with Caribbean governments.
Meanwhile the tax imbroglio has become a political flashpoint in Antigua. The Antigua Hotels and Tourist Association this week issued a statement calling for “all hotel tax concessions to be made available on an equal and fair basis” to all hotels irrespective of size.
“Anything less creates an un-level playing field, and gives rise to potentially massive legal and public relations problems for Antigua and Barbuda as a tourism destination,” said the statement, quoted in an Antigua Observer report.
Meanwhile Antigua’s opposition United Progressive Party (UPP) defended the 2009 concession agreement, describing the pact as “one hundred percent legal.”
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