The main Opposition St Lucia Labour Party has criticised a government decision to grant an estimated $24 million tax exemption to Sandals Resorts International, describing the decision as a cruel and malicious act to deny St Lucia the revenue it wold have earned.
Opposition MP, Ernest Hilaire is calling on the government to explain why it approved a 100% exemption from the payment of withholding tax for the hotel chain. The exemption covers the period 2001-2009.
The government’s decision came to light after a confidential cabinet conclusion dated August 21, 2017 was leaked on social media.
Hiliare, who is also the Opposition spokesman on investment and business, described the exemption as extraordinary and very unusual.
“Whereas the Act provides for government to exempt the payment of taxes when it is just and necessary, we cannot see how in this instance such a decision by the government of St Lucia is just and necessary,” Hilaire said.
Hilaire called on the government to clarify the reason behind its decision and he questioned whether other hotels and businesses on the island will also benefit.
“We need the government to make a very clear statement to tell us on what basis such a decision was made and also to tell us whether other hoteliers and business places will also be provided with such an exemption. These are critical facts that the government need to provide,” Hilaire added.
Hilaire also took issue with statement by the Minister in the Ministry of Finance Ubaldus Raymond that the money was not owed to St Lucia.
“If the monies are not owed, why provide an exemption? Because if you did not owe it in the first place why provide an exemption? they may have been a dispute over the payment of it and how much had to be paid but if that’s the case let St Lucians know exactly what are the issues involved because to give up $25 million is not an easy decision to be made,” he added.
News of the Sandals tax exemption comes on the heels of statements by Prime Minister Allen Chastanet that St Lucia’s economy was not generating enough revenue to adequately support the provision of basic services such as roads, schools and healthcare.
The Prime Minister said St Lucia has been running a deficit for the past 20 years which has resulted in the diminished quality of roads, schools, healthcare and national security.
“It is not just unfair,” Hilaire said, “it is a cruel and malicious act to deny the country the revenue that it would have earned.”