Sandals Resorts International (SRI) is upset with PM Gaston Browne’s administration for wanting to put an end to an agreement that gives a 65 per cent concession on Antigua and Barbuda Sales Tax (ABST) on room rates. The concession was written into the hotel’s agreement with the Baldwin Spencer led United Progressive Party (UPP) administration in 2009.
The Antiguan Prime Minister has taken the decision to review the agreement, which would see the hotel chain pay a reduced percentage of the Antigua and Barbuda Sales Tax (ABST) collected on room-rates.
Sandals Resorts International (SRI) has accused the government of unilaterally reneging on the agreement, “without cause or notice”.
The Gordon “ Butch” Stewart, led Sandals 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.
Prime Minister Gaston Browne contends that Sandals is billing its guests in Antigua for 100 per cent of the ABST and paying over just 35% of the amount collected, an allegation that Sandals strenuously refutes.
Sandals Resorts International is now alleging that during the public spat, Prime Minister Browne made two “very serious and highly defamatory allegations against Sandals”.
“First you assert that Sandals is billing guests for 100 per cent of the Antigua and Barbuda Sales Tax and paying over to the Government only 35 per cent of the amount collected. How could you, Honourable 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,” SRI said in a statement responding to a letter addressed to its chairman, Gordon ‘Butch’ Stewart, and published in the Daily Observer newspaper in Antigua.
It further sought to explain: “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.”
“Our accounts at Sandals Antigua, as long we can remember, have been audited by internationally recognised accounting firms – first PricewaterhouseCoopers, and more recently by Grant Thornton International. How could they possibly account for the extra 65 per cent of ABST that you have accused us of retaining for our benefit?”
SRI further accused Browne of making a “grossly irresponsible and incendiary statement” that Sandals Resort pays zero taxes into the Government Treasury and will do so for 25 additional years.
It said the comment has no factual basis. Furthermore, the hotel chain stated, government taxes and imposts for the fiscal year ending May 31, 2015 stood at more than US$5.2 million, while the amount for the 2016 financial year was US$5.8 million.
SRI further contended that it estimates its direct contribution to Antigua and Barbuda exceeds US$27.5 million per annum, it earns more foreign currency than any other resort chain on the island, its advertising budget for the island surpasses that of any other tourist operator on the island, its wage bill competes only with that of the Government, and its efforts to increase airlift to the island is unrivalled.
“In light of all the foregoing and the damage which your letter of June 17 has done to the reputation and good name of Sandals and its many loyal employees in Antigua, we respectfully submit Honourable Prime Minister that it behoves you, Sir, to set the record straight and withdraw your letter of June 17, 2016 for, as you will learn, it is grossly defamatory. As the Daily Observer seems to have received a copy of your letter… it is only fitting that we request that you likewise release a copy of this response to the newspaper as well.
“The contents of your letter have gone well beyond Antigua and have been picked up by social media including Facebook and other international media. The potential irreparable damage is enormous and we are compelled to take the necessary legal steps to protect our sterling reputation and our brand,” the correspondence ends.
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