The ongoing and as yet unresolved tax dispute between Sandals Resorts International and the government of the Turks and Caicos Islands (TCI) may turn out to be just the tip of the iceberg so far as Sandals’ legal issues are concerned.
The genesis of the dispute with the TCI lies in Sandals’ practice over the past 20-plus years of charging guests at its Beaches resort in Providenciales the mandatory accommodation tax of 12 percent on the full amount of each bill.
However, Sandals paid to the government only 60 percent of the tax collected, arguing that, as an “all-inclusive” resort, part of each bill represented food and beverage service, etc., which is not subject to the accommodation tax.
Although it is believed that guests were in effect told that the full 12 percent charged on the entire bill was a government tax, Sandals retained 40 percent of that amount for its own use and benefit.
The amount of tax retained by Sandals was, until recently, widely believed to be in the region of US$26 million; however, in a bombshell revelation on local radio a few days ago, leader of the opposition, Washington Misick, claimed that the total amount of unpaid taxes and penalties was nearer $164 million.