"The Barbados government has granted millions of dollars in concessions to Jamaican hotel magnate Gordon “Butch” Stewart who recently signed an agreement to operate a Beaches Resort and Sandals hotel there.
According to an article written by Roy Morris, Editor-in-Chief of the Barbados Nation newspaper, for the next 25 years, Beaches and Sandals will be exempted from paying all import duties, taxes including VAT, imposts and levies of any nature whatsoever on the importation or local purchase on all capital goods needed for the equipping, operation and promotion of the hotel, as well as on all food and beverages.
When that tax holiday period is over, Sandals will only be required to pay half of the “applicable rates and taxes prevailing” for the next 15 years.
The details of the concessions were contained in a letter dated Tuesday, November 5th, 2013, and signed by Minister of Finance and Economic Affairs Chris Sinckler.
The Nation newspaper said the tax holiday period began on Tuesday, the day before Sandals officially began operation in Barbados and encompasses the period before the start date of the commercial operation of the hotel, and while it is being acquired, expanded and developed. Sandals in Barbados will be managed by Josef Zellner, who once managed Beaches Turks and Caicos Islands.
The Barbados Minister of Finance further advised that the letter was only interim approval which shall remain valid until replaced by a permanent letter together with the appropriate statutory instrument to be issued by him.
What the newspaper describes as a “sweetheart deal”, includes the waiver of:-
(a) all import duties, taxes, imposts and levies of any nature whatsoever, including Value Added Tax, on the importation or local purchase of:
(i) all capital goods such as building materials, articles of hotel equipment, furniture. furnishings, fixtures, fittings, construction machinery, boats, watercraft, vehicles for the Hotel's use, televisions, computer equipment, telephones, software, hardware, shrubs and plants, garden and agriculture equipment, promotional and marketing materials for operating the Hotel and for the cyclical re-furbishing undertaken from time to time in order to maintain the Hotel to the standards of the Sandals brand;
(ii) consumables for the operation of the Hotel, including but not limited to operating supplies, soft furnishings, printed materials, guest supplies, spa supplies, paper, stationery, books and spare parts for equipment;
(iii) food, alcohol and beverages;
(b) all import duties taxes, imposts and levies of any nature whatsoever on all vehicles required for the operation of the Hotel including vehicle assigned to senior managers;
(c) all import duties taxes, imposts and levies of any nature whatsoever on personal and household effects and vehicles for senior staff (as outlined in (b) above) who are contracted to work in Barbados and are not citizens or permanent residents of Barbados;
(d) Value Added Tax on the provision of services that directly relate to construction works or cyclical refurbishment of the Hotel undertaken from time to time in order to maintain the Hotel to the standards of the Sandals brand;
(e) all import duties taxes, imposts and levies of any nature whatsoever on all vehicles required for the operation of the Hotel including vehicle assigned to senior managers;
(f) all import duties taxes, imposts and levies of any nature whatsoever on personal and household effects and vehicles for staff who are contracted to work in Barbados and are not citizens or permanent residents of Barbados.
Jordan Samuda, group manager, procurement division of Sandals International, said the conglomerate was delighted with the terms of the concessions, which he described as competitive.
“The product that we will put out in Barbados will be one of the best that we put out anywhere in the Caribbean,” Samuda told the Nation via telephone from Jamaica.
Samuda said he did not think Sandals would have been able achieve the excellence their brand represented without the concessions, and noted that the tax breaks would allow them to able to keep their product in tune with the times.
“They allow you to put a product out for your guests that can compete with anybody worldwide. . . . Duty free concessions allow us to up the ante on the food and beverage product. You have the physical aspect which you can continue improving and continue investing in, you also have the daily food and beverage product that you are able to provide.
The Sandals executive praised the efficiency of Sinckler and the various civil servants, Customs and Port Authority for facilitating the group to swiftly get the relevant documentation and materials processed between the signing of the Memorandum of Understanding (MOU) with Government on October 18 and the hotel’s opening on Wednesday.
He was particularly impressed with Sinckler, the Barbados Minister of Finance, saying: “Obviously the minister understands and can see what this level of investment in Barbados can do and will do.”
In his recent ministerial statement on the MOU between Government and Sandals International, Minister of Tourism Richard Sealy said the arrival of Sandals marked a “seismic shift for the tourism industry in Barbados” in its effort to capture a bigger share in the very competitive global tourism market.
“It is expected that these two properties will contribute annually in net terms, that is, the money to be retained by the taxi drivers providing transfers, the farmers; the 1 500 workers; the utility companies and others an amount in excess of BDS$100 million to the Barbadian economy.”"