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Antigua Hotel Assn wants equal tax breaks; Spencer defends concession

  • Written by wiredja news
  • Published in Tourism
ANTIGUA, June 22, 2016- The Antigua Hotels and Tourist Association is calling for all hotel tax concessions to be made available on an equal and fair basis to all hotels whether big or small.

The association issued a release in light of the Sandals dispute saying 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.

The association suggests either all hotels be allowed to charge its guests just 35 per cent of the Antigua and Barbuda Sales Tax or the deal with Sandals be nullified.

The association gives justification for most concessions regularly offered to hotels but says on the other hand, certain concessions put the country and the vast majority of hoteliers at a significant disadvantage—especially when these concessions are not granted equally across the board.

The association stresses in several ways that as a matter of public policy, any concessions and incentives made available to one hotel should be made available to all.

The association says otherwise some hotels will be left at a distinct advantage over the others and this discourages investment, tarnishes the country’s reputation, and ultimately results in the loss of jobs and revenue.

Former Prime Minister and Opposition leader Baldwin Spencer

In the meantime, Antigua's United Progressive Party (UPP) has defended the 2009 concession agreement it signed with Sandals while in power stating that "the ABST (Antigua and Barbuda Sales Tax) concession granted in 2009 to the Sandals Group is 100 per cent legal.” 

in a statement published in the Antigua Chronicle newspaper, the UPP said "Browne’s Cabinet has torn up the agreement under which Sandals agreed to establish an “ultra luxury-included” Beaches resort that would bring in more foreign exchange, reduce joblessness in the island, bring in greater airlift and generally stimulate the economy, in exchange for certain tax concessions. Sandals has similar or more generous tax concessions with Barbados and Grenada, both of which have reported big growth in tourism.

Contending that Section 16 of the Finance Administration Act 2006 gives discretion to the minister of finance to make the concessions, the UPP said it was granted in order to secure the construction of the Sandals Grand Hotel, the economic impact of which is unquestioned.

“A 65 per cent ABST discount was granted until the end of 2014; 60 per cent discount until the end of 2022 and thereafter no discount. In contrast: the complete waivers granted to Yida and Paradise Found (two other resorts) are unjustified due to the scant benefits offered by these projects, which are distinguished by faulty agreements granting vast land allotments, with no employment guarantees or performance clauses,” the UPP charged.

The Baldwin Spencer-led UPP noted that Sandals had recently announced the expansion of its room stock in Barbados, and new projects in Tobago and Mexico. Meanwhile in Antigua, unemployment continued to rise, “with the ALP Government neither able to close a single deal nor commence construction on a single new project”.

“The UPP demands that the ALP honours all concessions with the Sandals Group in the interest of protecting both the current Sandals employees and the broader investment climate,” the statement said.