Government’s concessions to international hotel chain Sandals has been paying big dividends, Minister of Finance Chris Sinckler today said in Parliament.
In fact, he revealed that the country had reaped just under a billion dollars in investment as a result of the deal.
“We signed an MOU [Memorandum of Understanding] to do a Sandals in St Peter. Even before the property in St Peter had started, the Sandals Corporation . . . by virtue of the refurbishment and the extension of the property at Casuarina would have already by the time that is completed at the end of this year, have invested more than the $400 million in the economy of Barbados and that is on the level of the effects of the investment alone.
“They are due to start, in another eight months, . . . when they do that, you are talking about an additional $400 million in investment. If it all comes to pass that’s just under a billion dollars of investment.”
“ . . . Show me why that does not equate to a sensible use of . . . concessions.”
In further defence of the deal with Sandals, Sinckler said the island now enjoyed increased marketing and additional airlift from Canada, the United States and parts of South America.
“So when people make these statements I don’t dismiss them, but we have to apply some additional intellectual exercise,” he said.
It was a direct hit back at former Prime Minister Owen Arthur who recently said the Sandals tax concessions were hurting the island’s dwindling finances. Arthur had also accused Government of setting “an extraordinary precedent by extending complete duty and tax free status to Sandals for 40 years, with the intention of making such a status available to other enterprises in our main sector – tourism”.
However, accusing the former Prime Minister of having a “road to Damascus experience” since he had offered generous concessions on several tourism projects while in office, Sinckler said there was no empirical evidence to date to support Arthur’s “bold and resolute statement”.
The international hotel chain, which began operations in Barbados in 2013 at the former Almond Casuarina Hotel in Dover, Christ Church, has been granted a 25-year tax holiday that includes a waiver on all import duties, taxes, imports and levies on capital goods such as building materials, as well as food, alcohol and beverages. The waiver also extends to duties on the importation of motor vehicles and personal and household effects for senior hotel staff and non-Barbadian workers.
At the end of the 25-year tax holiday the rate on concessions will be cut by 50 per cent for an additional 15 years.
The deal has also been criticized by the International Monetary Fund, as well as retired chartered accountant Peter Boos.
However, while accepting that Barbados had to be strategic about how and where it gave concessions, Sinckler warned that Caribbean countries, who were being pitted against each another by investors, were at risk of being left behind, “if you don’t join the party”.
Therefore, he suggested that the 15-nation Caribbean Community should take a joint approach on the issue of concessions.
“We have to have a discourse at that level about what we as countries are prepared not to offer or spaces that we are not prepared to go into when it comes to these things,” he said.