Time For Barbados Tourism Taxes Review?

The stalemate between the Barbados Government and international hotel chain Sandals Resorts International (SRI) has prompted the island's Opposition Leader Bishop Joseph Atherley to call for a review of how taxes are imposed on the island’s bread and butter tourism industry.

At the same time, the St Michael West Member of Parliament has dismissed as “out of the ordinary” . . . if it is that Sandals is asking for the government to make a commitment that would bind all successive future governments in Barbados.

Atherley was sharing his views on the development days after Minister of Tourism Kerrie Symmonds hinted that government was willing to give up the planned $800 million investment in a Beaches property here rather than agree to Sandals’ terms.

After carrying out some US$17 million in beach work at the old Almond hotel, St Peter location, SRI officials pulled the plug on the planned state-of-the-art Beaches facility, insisting that the Mia Mottley led administration was not willing to honour the original agreement that was signed with the Freundel Stuart administration six years ago.

However, Symmonds insisted that the Jamaica-based hotel group was asking the government for a commitment that government was not prepared to offer.

“What they want is a commitment from this Government that there will never be a future Government ever in Barbados that will decide that they are going to impose a level of taxation on that company and we cannot tie the hands of a generation not yet born and we will not propose to try to do so,” Symmonds said earlier this week.

In an interview with Barbados TODAY, Atherley said while he has not yet spoken directly to SRI officials he was in agreement with the stance that Government was taking.

“So I haven’t heard directly from Sandals but I hope to have that privilege shortly. If what is reported is what is accurate and they want the government, as said by the minister, to commit to something that binds all successive governments, that to me is out of the ordinary . . . But as I said, I haven’t heard from Sandals so I don’t know that is the case,” said Atherley.

“My understanding is that an agreement was signed for an additional Sandals presence in a context where certain tax arrangements would apply. What I understand now from the government, and what I see reported in the media, is that what is being asked for is a situation that binds all successive governments never to change those arrangements. If that is the case, then I think that is out of the ordinary,” he added.

In light of this, Atherley said perhaps the time had come for research to be done on how taxes were imposed on the tourism industry, adding that as it currently stands, it is lopsided.

“I think where there are anomalies or imbalances. They need to be rectified. I understand the power of big investment but I understand also the principle of a level playing field,” said Atherley.

In order to attract the hotel chain here, the Freundel Stuart Democratic Labour Party (DLP) administration offered a 25-year tax break that includes a waiver on all import duties, taxes, impost and levies on capital goods such as building materials, as well as food, alcohol and beverages.

The waiver also extends to duties on the importation of motor vehicles and personal and household effects for senior hotel staff and non-Barbadian workers.

And when the tax holiday period is expired, Sandals will only be required to pay “half the applicable rates and taxes prevailing” for another 15 years.

Sandals officials have been insisting that they were not asking for anything that was not originally agreed to when the agreement was first signed.

“We didn’t ask for anything new. We did not ask for anything outside of what was exactly in the original negotiation,” SRI Group Deputy Chairman Adam Stewart told Barbados TODAY in a recent interview.

Stewart insisted that Sandals’ relationship with Government was not adversarial, but said the ball was in the court of the administration.

“The relationship is not adversarial, but US$450 million is what we call Superman money. And for us to take that risk we would only do it under the original agreement,” he had said.