Paul says hoteliers should not receive tax breaks before signing MOU
The Barbados Agricultural Society (BAS) is moving to block tax concessions that hoteliers are about to access unless systems to prevent fraud and protect the agriculture and manufacturing sectors are first put in place.
Chief executive officer James Paul is insisting that unless hoteliers sign a Memorandum of Agreement (MOU) with the BAS and the Barbados Manufacturers’ Association (BMA) they should not get a cent in tax breaks.
He said he would be appealing to Minister of Finance Chris Sinckler on these matters.
Sinckler announced yesterday at the third quarterly general meeting of the Barbados Hotel and Tourism Association (BHTA) that from next week, hotel properties would have access to promised concessions similar to those given to Jamaican hotel chain Sandals, but under several conditions. Those include signing the MOU which stipulates, among other things, that hoteliers first source products locally before looking outside of Barbados.
However, in response to concerns raised by BHTA president Sunil Chatrani about the MOU requirement, Sinckler said that while it was best for the parties to sign the memorandum, he would still allow the concessions to be accessed if it was not.
But Paul is adamant that the MOU should be a prerequisite for the tax breaks and not an option. He also argued that there was no guarantee that products imported by hoteliers would end up in the tourism sector – an area of specific concern for the BAS.
“If we don’t have a good policing system, we all know what goes on in this country. Things come in for one purpose and they find themselves other places. We don’t even have the systems in place to police that right now, to say what they want is actually what they are gong to use in the hotel. We don’t even have that in place and they want us to rush off and give these concessions without an MOU. We have to put a lot of things in place,” Paul told the media today.
“We are dealing with a situation where, if we allow the implementation of the concessions in the way in which they conceive it is going to go, it could lead to huge fraud in this country. And who would be undermined? Our local production sector. Jobs [are] at stake. That is what they don’t seem to understand.”
“In other countries, even in Jamaica where this happens, they have a very strict regime that if, for instance, a product is found not be used in the tourism sector they lose the licence immediately. So you must understand what we are dealing with here,” Paul contended.
He said the MOU negotiated between the BAS, BHTA and the BMA would address that concern and it therefore had to be signed.
Paul said he found it “strange” and “diabolical” that, after negotiating the MOU “in good faith” and listening to the concerns of the BAS and the BMA, Chatrani would now raise concerns about signing the MOU.
“He is implying that, first of all, he wants the concessions but he doesn’t want to sign the MOU. That certainly is something that we cannot support. How I interpret the words of Mr Chatrani is ‘give us the concessions and we may or may not support the local productive sector’,” Paul said, adding that the BHTA’s position came across as disrespectful to the agriculture and manufacturing sectors.
“It seems as if it is strong-arm tactics. I know they are going to say the economy needs tourism and we need the foreign exchange, and it seems to me there is some attempt to use some type of panic . . . We cannot be thinking that way.”
Saying that the BAS was only asking for was fairness and equity, Paul said Sandals had already made its commitment to source products locally, once the items could be produced here, before looking elsewhere.
“I want to say to the Barbadian public to stand behind the agriculture sector because they can’t employ everybody in the tourism sector . . . We cannot have a situation where the tourism sector seems to think they should be granted millions of dollars in concession on taxpayers’ backs in this country and at the same time they have no responsibility whatsoever to develop the other sectors. It cannot be that,” Paul insisted.
Last week Chatrani told Barbados TODAY recommendations put forward by the BHTA were not included in the final draft of the MOU seen by the association.
However, Paul said today that if the BHTA had any concerns about what was contained in the document, the association should have asked for a meeting to discuss it and come up with a solution. He said the BAS was willing to meet with the BHTA to thrash out any concerns.
Meanwhile, executive director of the BMA Bobbi McKay told Barbados TODAY that while she was satisfied with the conditions outlined for the tourism industry to access the concessions, the MOU needed to be signed.
“I would feel more comfortable with a commitment from the tourism sector and not just a gentleman’s agreement and a handshake. This is too important for Barbados . . . We need to feel more confident that we are going to get the opportunity. This is taxpayers’ money that we are playing with,” she said.