PHILIPSBURG--Commissioner and United People's (UP) party leader Theo Heyliger wants the Island Government to honour agreements made with The Westin St. Maarten Dawn Beach Resort and Spa and Sonesta Maho Beach Resort and Casino, regarding the properties receiving exemption from paying room tax.
Both resorts have "letters of comfort" from Government, outlining Government's intention to amend the Room Tax Island Ordinance in such a manner that a waiver of room taxes can be granted for brand name resort developments for a period of time.
And, should the amended ordinance not be in place by a certain date, Government would partially waive certain fees payable by the resort for a period of time. Maho's letter of comfort was granted in 2003 and Westin's in 2005.
Heyliger said he wants these comfort letters honoured "to safeguard Government's integrity, and by extension, hundreds of jobs." "This issue can have far-reaching consequences, and there comes a time when we have to rise above party politics," he said, adding that he intended to make this clear to the Executive Council.
The Island Receiver is currently attempting to recoup years of unpaid room tax from Westin and Maho. As the ordinance was never amended, the hotel properties are obliged by law to pay the outstanding taxes. Maho has reportedly paid a portion of the tax outstanding, but is apparently seeking an audience with Government to discuss the issue.
The Executive Council is reportedly working on some sort of solution, but this is still being studied by advisors and probably by Legal Affairs. Westin and Government are currently in a legal fight over the resort's outstanding taxes. That case is expected to be heard in a month's time.
Heyliger is concerned about the island's image to investors, and the possibility arising of people having to lose their jobs if the hotels are forced to pay millions in back-taxes after the Island Government did not ensure that it lived up to its commitments. "It does not look good when investors cannot trust commitments of the Executive Council," he said.
"As the Room Tax Ordinance was never amended, the resorts took advantage of the reduced fees that were offered in the comfort letter, and that did little to cover the substantial investment needed to acquire the brand," Maho management contends.
The comfort letter recognised that substantial investments would be necessary in order to acquire an international hotel chain franchise, and it clearly committed Government to assisting the resorts.
"The investments to acquire the franchise were substantial, and, on the basis of this letter, Sonesta Resorts went forward with its investment in the properties, expecting the amendments to the Room Tax Ordinance to be formalised as indicated," the statement further read.
"We can only hope that Government will take the responsibility and honour its commitments by making the necessary amendments to the Room Tax Ordinance, and retroactively provide the resorts with the relief in the room tax payments that they were originally led to believe would be theirs under the ordinance," Maho's management said.
Heyliger said the letters of comfort were above any one political party, as no one political party had granted the letters. "It was the Government of St. Maarten, so it was our responsibility to get it done. Reneging on these commitments does not bode well for our image and could have serious consequences," he warned.
