Sandals collects 100% of Antigua and Barbuda Sales Tax (ABST) from its customers and, according to Browne, keeps 65 per cent of the yields, and handing over just 35% to the Antiguan government.
The Antigua and Barbuda government is trying to change this, but Stewart is claiming it means the rescinding of a concession agreement with Sandals.
Stewart, maintains that this is a legally binding agreement made in good faith and in keeping with the Treaty of Chaguaramas which sought to economically galvanise the Caribbean and encourage inter regional trade.
Sandals has written a letter to Prime Minister Gaston Browne in disagreement with his position. “How could you Prime Minister possibly conceive that such a practice could ever occur? It is simply not true-it does not now and has never occurred. At Sandals Antigua, to which the Host Country Agreement applies, the all inclusive rate is fixed, taking into account the agreed Host Country ABST rate payable under the agreement.”
“Where the guest incurs charges at the hotel, which are not covered by the ‘all inclusive charge’ –for example spa services or special wine service – those charges are added to the bill and ABST charged at the applicable rate of 15 per cent. The full amount is paid over to the government.
“In no circumstance did we operate a system of charging ABST at a higher rate and accounting to Government at a lower.”
Sandals also charged the Antiguan Prime Minister with making “two very serious and highly defamatory allegations against Sandals” and signalled that the resort chain would be pursuing legal action to protect its reputation and brand.
The disagreement with the Antigua and Barbuda government highlights the extent to which Sandals polarises opinion about its business model in the Caribbean. The Sandals chain, founded by Jamaican billionaire Gordon Butch Stewart, has asked for significant tax concessions in other islands in which the all-inclusive hotel chain operates.
In Antigua and Barbuda, the Sandals Resort pays no direct taxes to the government treasury, an agreement that extends for another 25 years. It also pays no taxes on imported capital items, none on food or beverage, and none on items needed for resort improvements.
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