Introduction
I have stated multiple times about my thankfulness and gratitude to the contribution that Beaches Resorts have made to this country. After the Government conducted an audit of the hotels and restaurants in the Turks and Caicos in 2016/17, it was revealed a significant amount was owed by Beaches Resort. Beaches resort on the other hand claimed they do not owe anything and the Government owed them because they were paying the Government taxes for children under 12 when really and truly they should not have been paying as the law does not allow collection of taxes for guests under 12.
This month, the Government not only presented a motion in the House to write off the Beaches Resort debt but they also presented the Encouragement of Development (Amendment) Bill 2020.
Motion to write off disputed tax remittance
A motion was presented to write off $9,864,324.15. According to the motion, Beaches was paying 12% of 60% of the money collected by guests. The motion stated that was the law at that time. It did not specifically say the law. No law should be in place to only pay a percentage of the taxes collected. If you collected taxes then all should be paid over to the Government.
The motion also mentioned about the Hotel and Restaurant Taxation Amendment in 2013 that required all hotels and restaurant to pay 12% on the charges collected by guest. The motion also included references to the letter that Hon. Washington Misick wrote to Beaches in 2013 stating that the taxation amendment does not apply to them given that there is agreed amount of 60% in the Development agreement. However, the Government is now saying that the Development Agreement does not contain such terms. There was a lot of rumours about a gentleman’s handshake agreement from the inception of Beaches. Could it be that it was indeed a gentleman’s handshake agreement and that is why they were not paying the 100% of the taxes collected?
In any event, the Government has decided to abandon the claim so Beaches do not have to pay the disputed tax remittance. The amount was not written off because the amounts in dispute were never recorded on the financial statements of the Government. However, at the end of the day, the output is the same in that Beaches do not have to pay.
Encouragement Development (Amendment Bill) 2020
This bill seeks to exempt an all-inclusive resort for 25 years from any new tax or modified tax. This means if any changes take place in our tax system, this will not apply to all-inclusive resorts. The two conditions are as follows:
- The resort maintains a threshold of 9, 500,000 in tax remittances in annual basis
- The resort offers 650 or more rooms per single premises.
Based on this new bill, the only resort that this applies to is Beaches Resort.
Conclusion
I understand the need to ensure that an amicable solution was needed to deal with the Beaches Resort fiasco. However, what I don’t understand is that the “small man’ continues to suffer and has to pay the full taxes. What kind of gifts can we give to the small man? Why don’t we abandon some of their taxes and why don’t we encourage the expansion of small businesses?