Cabinet considering legislation compelling hoteliers to pay tips to workers

Durrant Pate/Contributor

The Cabinet of Antigua and Barbuda has summoned the tax authorities there to explain how Jamaican-based resort chain Sandals was allowed to incur such massive tax debt.

The tax authorities are demanding that Sandals Grande Antigua pay over $24 million in Antigua and Barbuda Sales Tax (ABST) collected between 2017 and 2021. The ABST is a tax which is imposed on the totality of the bill that a guest at the hotel has incurred during their stay, and collected by the hotel on behalf of the Government.

The Gaston Brown-led Cabinet has invited the commissioner of Inland Revenue, his deputy, a legal advisor and a technician to address the brewing ABST discord with Sandals. It has been reported that Sandals has not been paying over all the ABST, which it has collected from its customers, upon checkout.

During the previous administration, an arrangement had been made with the resort for it to deduct a portion of the ABST to compensate for the marketing of the destination when the resort was advertised.

However, when the Gaston Browne administration learned of this practice, it immediately reversed that policy and required the hotel to pay 100% of its ABST collection to the Inland Revenue Department (IRD) but it appears this wasn’t the case as the resort has re-commenced making similar deductions.

The IRD is demanding an amount exceeding $24 million collected between 2017 and 2021 and is continuing its audit to investigate the deficit in payments made in 2022 and 2023.

Antiguanewsroom.com is reporting that the Cabinet has also learned that workers at the hotel are not allowed to accept tips from customers but must place all tips received into a pool, which goes towards funding the Sandals Foundation.

As such, the Cabinet is considering legislation that will compel hoteliers to pay tips to workers and not to divert those resources to other ends.