Home' Trinidad and Tobago Guardian : December 1st 2016 Contents BG20 | REGIONAL
BUSINESS GUARDIAN guardian.co.tt DECEMBER 1 • 2016
were a bad move
Former Prime Minister Owen
Arthur is contending that tax
concessions granted to the
Caribbean hotel chain San-
dals are hurting the island's
finances, already reeling from
a decline in revenue from the offshore fi-
nancial services sector.
Presenting a lecture recently, he said an
already eroding tax base occasioned by
changes to the second largest revenue earn-
er---the offshore sector---was made worse by
the concessions, not only to Sandals, but to
the entire tourism sector, the island's pri-
mary money earner.
"The Government of Barbados has set an
extraordinary precedent by extending com-
plete 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," Arthur said.
Sandals, which began operations in Bar-
bados in 2013 at the former Almond Casua-
rina hotel in Dover, Christ Church, has been
granted a 25-year tax holiday that includes a
waiver on all import duties, taxes, imposts
and levies on capital goods such as build-
ing 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.
Faced with mounting pressure from the
accommodation sector for a similar deal,
the Government eventually announced that
the hotel sector would be eligible for similar
Arthur said the loss of revenue as a re-
sult of these concessions had come after
Barbados' main financial trading partner,
Canada, had drastically reduced the island's
once lucrative offshore business.
He explained that Barbados had been
attractive to Canadian companies because
this island was the only Caribbean territory
with a tax information exchange agreement
This advantage ended in 2007, he said, and
Canada has since entered similar agreements
with other countries and had been extending
to them other tax deals that were beneficial
to offshore companies.
"In consequence, international business
and financial services have migrated from
Barbados, leading to a decline in revenues
directly generated by the sector from $356
million in 2007 to $97 million in 2013," Ar-
He said Barbados' other major trading
partners had also been making changes to
their regulatory regimes that will adversely
affect the operations of international busi-
ness and financial entities based here.
Arthur said the declining offshore revenue
combined with the tourism tax giveaways,
"signify that the Government of Barbados
will continue to experience significant dif-
ficulty in raising the revenue to finance the
plethora of public services that has been put
in place since Independence".
He said at its peak the international busi-
ness and financial services sector produced
34 per cent of Government's revenue, reach-
ing an estimated total of $356 million.
Sugar yields not
so sweet this year
Global sugar yields this year have been anything
but sweet and the Sugar Association of the Caribbean
(SAC) warns that the price of the commodity will rise
on the international market.
At its just concluded 165th meeting in Kingstown
last week, the regional body reported that global pro-
duction has fallen short by some five million tonnes,
blaming the drop on changing weather patterns.
In the Caribbean, the sugar sector was severely
affected by prolonged drought conditions and the
SAC members, Barbados Agricultural Management
Company, Belize Sugar Industries Limited, Guyana
Sugar Corporation Inc, and the Sugar Manufacturing
Corporation of Jamaica Ltd posted declines.
Overall SAC members produced just over 450,000
tonnes of sugar for the 2015-2016 crop.
Notwithstanding the challenges, the association
noted that Caribbean would be able to sell all its pro-
duce to European Union and the United States.
The EU remains the biggest market, taking some
533,000 tonnes while the United States takes 43,000
tonnes. This year, projected sales are 26,000 and
25,000 tonnes respectively.
The SAC was, however, paying close attention to
the EU market, which is still trying to come to terms
with the Brexit vote. The association said it would have
to renegotiate a UK-Caricom Free Trade Agreement.
SAC countries have begun their own dialogue and
they have agreed to pressure politicians to ensure
their concerns about the future of the sector will be
addressed when the negotiations begin.
St Kitts and Nevis civil
servants get backpay
It's shaping up to be a jolly good Christmas for civil
servants in St Kitts and Nevis.
That's because Prime Minister Dr Timothy Harris
has promised to pay them double salary this Yuletide
He disclosed that an extra month's salary would
be made in December to all civil servants, auxiliary
workers, and pensioners on government's payroll.
The Prime Minister said the payout would benefit
not only federal employees and pensioners but also
those on the payroll of the Nevis Island Adminis-
The public sector is being encouraged to follow in
"My government encourages all entities in the pub-
lic and private sectors to make a very special effort
to deliver a gratuitous payment to their employees
in December," Harris said in an address.
He estimated that EC$30 million (US$11.1 million)
would be pumped into the economy as a consequence
of the bonus.
The announcement followed weeks of prompting
by the opposition St Kitts and Nevis Labour Party
(SKNLP). However, the party had argued that two
government ministers should not benefit from any
bonus: Vance Amory and Mark Brantley.
SLP chairman Marcella Liburd said that the two who
run the NIA, were receiving monthly double salaries
from St Kitts and its sister island Nevis, and should
not be afforded any extra bonus if one was given to
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