By Elesha George
Prime Minister Gaston Browne has cancelled an agreement with Sandals Grande Antigua that permitted the hotel to deduct tax concessions from the Antigua & Barbuda Sales Tax (ABST). The decision comes after Sandals reportedly failed to fulfill a four-year-old commitment to refurbish an existing hotel property.
According to Browne, the government had initially waived the sales tax for Sandals based on their proposed plans to renovate the facility. However, the refurbishment has yet to materialise, and Sandals continued deducting the tax concessions despite the stalled project.
An Inland Revenue Department (IRD) report, referenced by the prime minister, revealed that Sandals transfers as much as 50 percent of its revenue to its overseas parent company. Additionally, Sandals reportedly benefits from government agreements that allow deductions on entertainment, advertising, and water sports expenses. This setup has led Browne to accuse the hotel chain of manipulating the tax system to minimize its financial obligations in Antigua and Barbuda.
According to the IRD’s assessment, Sandals owes approximately EC $27 million in taxes, which Browne claims the company has attempted to reduce through legal manoeuvres. The decision to cancel the concessions was made by Cabinet last Wednesday, November 6.
Browne elaborated on the tax discrepancy, explaining that Sandals had reportedly been collecting only 13 percent instead of the required 14 percent ABST. He questioned, “If the law says that you’re supposed to collect ABST at 14 percent, and you collected 13 percent, whose problem is that? We don’t even have proof that they collected 13 percent.”
The prime minister also expressed frustration with Sandals’ recent legal action, describing it as a “frivolous lawsuit” aimed at delaying tax obligations. “They can’t win,” Browne declared confidently.
To address similar practices, Browne announced plans to propose amendments to the Companies Act to protect workers in the event a company goes into liquidation.
He noted that Sandals separates the ownership of physical assets from the management entity, Dickenson Bay Management Limited, which employs the staff. This structure, Browne argued, could leave employees without severance compensation if Sandals were to liquidate.
“I’m committed to taking this matter to Cabinet,” he said, “and to amend the Companies Act so that companies owning the revenue-generating assets are responsible for severance. This would make severance a first charge on the property in case of liquidation.”
Browne also signalled intentions to introduce legislation that would prevent hotels from withholding employee tips.
In a strongly worded warning, he criticised Sandals’ tax practices as exploitative. He cautioned that if Sandals decides to retaliate by closing its Antigua resort, his administration would consider legislative action to seize the property.
“If Sandals decides to spite us and lock down their hotel, we go to Parliament, we compulsorily acquire it, and sell it to someone who will keep it open,” Browne asserted. “We are not to be trifled with. If Sandals thinks they’re untouchable, they’re wrong.”
Sandals Grande Antigua has declined to comment on the prime minister’s statements.
