Politicians and their supporters have to be very careful what they say or do when they are in Opposition or even in Government as you never know when the shoe will be worn on the other foot.
Hypocrisy on both sides
In October/November 2016, the PNP administration brought to the House of Assembly a bill to write off $12 million in penalties for Cable & Wireless. This was related to taxes that Cable & Wireless should have charged their customers for the period June 2010 to May 2014 as a result of a change in law in 2011. However, management of Cable & Wireless (including myself, yes I was CEO then) was not aware of the change in law and never charged the customers the taxes and therefore never collected the taxes and so the Government thought it was fitting to waive the penalties as it would have detrimental impact on the company including the employees.
The Opposition (the PDM) at that time claimed they did not have enough information and did not vote or supported the waiver of the $12million. In fact, this write off was one of the campaign tactics that the Opposition used during the 2016 campaign. Supporters of the party spoke strongly against this write off saying the Government should not do it and that the money could have been used elsewhere. Are we a bunch of hypocrites?
This week, the House of Assembly met and this time, the PDM administration brought to the House of Assembly the amnesty waiver to write off penalties of $85mllion for hotels and restaurants. This time the PNP voted against the bill like what the PDM did in 2012. The people that openly spoke against the $12million write off in 2016 are now very quiet with the $85mllion and it is only because their party is in power. The PNP supporters on the other hand are crying shame on this write off. Aren’t these actions of hypocrisy by both PNP and PDM?
I supported the write off for Cable & Wireless because C&W never collected the taxes from customers. Likewise, I will support a write off for the Hotels and Restaurants penalties especially if the hotels did not collect the taxes from guests. I also think the penalties calculations are excessive and a write off should take place. However, in the HOA, the Premier said that Beaches claimed they were told they only had to pay 60% of the accommodation tax. This is an alarming concern as the TCIG is saying there is no evidence of any agreement.
Now some supporters of this government are trying to turn this around and casting blame on Hon. Washington Misick. We are hypocrites. There is letter circulating around on Facebook by John Brown. How did John Brown get a copy of the Ministry of Finance letter? This letter was in 2013 when the Government made changes to the tax platform by charging guests 12% on all services they receive during their time in TCI. Hon. Misick stated that the Revenue Commissioner informed him that Beaches is paying 60% based on the Development Agreement. How could Hon. Misick be blamed when the Development Agreement was signed during the Taylor Administration unless another development agreement were made during Mike Misick administration? I spoke to Hon. Derek prior to publishing this article and he is not aware of any arrangements of Beaches only paying 60%. I also contacted Hon. Mike Misick and his administration never agreed to Beaches only paying 60% of the taxes. I believe what both the former leaders told me unless Beaches can show us something in writing.
How could an establishment collect taxes on behalf of TCIG and only payout 60%? How could an establishment operate without such a written agreement? Was Beaches only charging the guests 7.2% (which is 60% of 12%) or were they charging the full 12%? The law of the country is 12% and that is public knowledge and no agreement should supersede the laws of TCIG.
Reimburse the Companies that paid the excess penalties last year
I feel horrible about the fact that many other businesses especially the small ones paid excessive penalties in 2018 and early 2019 and there was no amnesty for them. (At least I am not aware of any). Some of these businesses had to borrow funds to pay for the penalties and now we have major hotels such as Beaches being waived of the penalties. Is it possible for TCIG to reimburse the businesses that paid the excess penalties in the last two years?
I know it is a tough decision for any Government to come to the people and tell them they are writing off $85million in outstanding penalties. Therefore, political parties must be cautious what they say or do when in opposition as you never know what shoe you will have to wear once you become the Government.
I am quite sure when Beaches was referring to the 60%, they were talking about the 60% service charges that they were entitled to pay employees.