On February 18th, the following Bills were read in the
House of Assembly for the first time and it was publicly announced that the
Debate would take place on March 4th and 5th :
The Hotel Tourism and Restaurant Taxation Bill (HRTT)
which provided an overhaul to the Law passed since 1985 allowing for a
modernization of the law and a strengthening of the collection of taxes;
The HRTT (Amnesty) Bill which allowed for an Amnesty
commencing April 1st and allowing for a waiver of all penalties and
payable on any outstanding taxes due and payable under the Hotel, Restaurant
and Tourism (Taxation) Ordinance for the years up to and including the year
ending 31 March 2019.
The HRTT (Validation) Bill which sought to ratify past
actions.
Regrettably not all persons were able to hear the
Debate in the House of Assembly where three serving former Ministers quite adequately
shared their thoughts on why we were where we are today.
Of particular concern was the Amnesty Bill that offers
relief to 41 local and expatriate owned Businesses. I offer again the following
facts as stated during the Debate:
There has been NO
WRITE OFF OF TAXES for any Business.
Financial Implications
There are
currently 41 establishments that are
in arrears position of which 7 have
been refferred to AG Chambers, 15
have paid the entire principal amount but not the interest (not accruing), and 19 have made no payments. (interest
accruing).
Of the 19
businesses, Beaches TCI and Club Med
collectively account for 96% of the
amount outstanding. Should these businesses opt to benefit from the Amnesty, $28,638,820 of principal will be
collected and $85,191,912 in
interest will be forfeited.
Total amounts in
arrear of principal and interest are $29,684,123
and $89,147,690 respectively as at January 31, 2019.
On the matter of Beaches, three former Ministers of Finance currently serving correctly
summed up the situation as it relates to Beaches. Hon Derek Taylor spoke to the
fact that the actions should be considered for what it is: a cleaning up
exercise; Hon Royal Robinson offered that it was a matter that the issue has
run on so long and now the “chickens have come home to roost and certain
adjustments must be made” and Hon Washington Misick stated that he believe that
this was a genuine oversight by all Governments: PDM and PNP since 1997. I
agree with all save for the fact that I
have every reason to believe that the immediate past Minister of Finance had
knowledge of this matter and in fact his Party has issued a Release saying that
he commissioned the Audit that revealed the Findings. The Audit covered
September 2014 – August 2016 and it revealed that though Beaches and successive
Governments operated on the understanding that it should pay 60% of the 12%
tax, there was no written evidence save a letter written by Hon Washington Misick
in 2014 confirming this to be the practise. Despite the findings revealing the
oversight on the part of all successive governments, my Government has requested
the payment of the full 100% of taxes for this period. I wish to thank the
Revenue Control Unit for its work. In addition I wish to assure the public that
Beaches and Club Med continues to pay its monthly taxes before the statutory
deadline.
As it relates to Club Med, who since its opening has been allowed to pay 40% of the
12% tax under a Development Agreement. This Development Agreement has since
expired and the former Administration had continued to collect under the same
rate under the expired Agreement.
To this end, the Revenue Control Unit
had to asssess both establishments on 100% and this is the matter before us.
Only Penalties are proposed to be written off. Penalties under the current Ordinance calculates monthly at
10% compounded. For an amount outstanding of $29,684,123, the total penalties
are $89,147, 690. To be clear all businesses owing under this Audit are now
attracting 240% in interest/penalty on the original taxes owed. As an example
if a business owes $10,000 in taxes, it now attracts a penalty/interest of
$38,000.00 for the Audit period. While penalties have been put in place to
deter late payments, we believe the rate of 10% compounded monthly was too
onerous and have reduced the rate and how it is calculated going forward under
the new Ordinance passed on Monday.
I wish to confirm that local businesses will benefit under this Amnesty. Despite there
being no request by the Opposition for a list of proposed beneficiaries, I now
release the list of businesses that stand to benefit under the Amnesty Program
and encourage them to take advantage of the offer that allows payment plans for
up to 2 years. I appeal especially to locally owned businesses that have
popular standing. We are more than happy to be able to provide such an
opportunity.