POND ISLAND–Government has approved tax holidays for three in-operation resorts and one that is yet to be built.
Approved for tax relief are Sonesta Group, Alegria Resort, Divi Little Bay Beach Resort and the still-to-be-built Planet Hollywood Resort by the Sunwing Group on the former Sonesta Great Bay Beach Resort property. The relief can span a decade.
Asked about the tax holiday in the Council of Ministers Press Briefing on Wednesday, Finance Minister Perry Geerlings said relief does not mean the resorts, all of which were severely damaged by Hurricanes Irma and Maria, will not pay any taxes for the next decade. Rather, the resorts will only get a reduction on the income generated from the refurbished or rebuilt portions of the properties.
Government was considering doing away with the tax holiday scheme prior to the hurricanes, but continued with it due to the need for an investor incentive. Geerlings said this incentive does not do much for the country.
“A tax holiday does not really deliver the money you would like to see for the country. It actually costs you money,” Geerlings said. Prior to the hurricanes, government thought “it is time to do away with that facility, then hurricanes came and there was a demand for it.”
There is a “false conception” that tax holidays draw more interest from foreign investors. This is far from the truth, Geerlings said, noting that government has more incentives than this one to encourage investors in general to become part of the economy.
In spite of the tax holiday not being extremely beneficial, Geerlings said government was “happy to provide some relief for the hotels.”
Looking ahead, government is to look into ways to encourage investors to give back to the community in support of education and other social projects in connection with the granting of tax holidays.
In the area of tax compliance, Geerlings said since the hurricanes there had been a noticeable increase in compliance by businesses that had been able to reopen their doors fully or partially. A complete picture is not yet clear, as a viable way of collecting and sorting data is needed, said Geerlings. Such data analysis will form part of the long pending tax system reform.
Source: The Daily Herald https://www.thedailyherald.sx/islands/89821-government-approves-tax-holidays-for-four-resorts