Sleepin Hotel denies favouritism in gaining concessions

GO-Invest audit report

– says business underwent “elaborate” qualification process

In light of the findings of an audit conducted into the Guyana Office for Investment (GO-Invest), which shows that Sleepin International Hotel & Casino Inc benefited from a series of tax holidays and waivers under the previous Administration, the hotel has denied being on the receiving end of favouritism, emphasising that the business had to undergo an “elaborate” process to qualify for the concessions granted.

The audit report, which was published on the Finance Ministry’s website on Friday, outlined that Sleepin Hotel signed a Memorandum of Understanding (MoU) with GO-Invest, on behalf of Government, agreeing to a corporate tax holiday for the hotel operations for a period not exceeding 10 years.
The agreement also catered for: the facilitation of granting a Casino Operator’s Licence; taxation of the casino operations at a rate of 35 per cent on its net profits with accelerated depreciation and unlimited carryover of losses; interest payments – not the principal of foreign loans being subjected to 20 per cent withholding tax upon repayment; waiver of Customs Duty, Value Added Tax, and Excise Tax on casino equipment, spares and related parts, and tax concessions for the importation of equipment, machinery, fixtures and fittings, furnishings, building and other materials.
According to the auditors, this MoU was the only one subjected to the official approval of the President, and there were no documentation from GO-Invest showing the rationale to explain or justify the methodology used for granting tax holidays to the hotel. However, in a letter to the editor on Sunday, owner of the Sleepin chain of hotels in Guyana, Clifton Bacchus, pointed out that the Government of the day had offered a regime of concessions for investments in the hotel and hospitality sector, which were available to all investors.
Bacchus noted that in order to benefit from these concessions, businesses had to comply with a “long and elaborate process” involving GO-Invest, the Finance Ministry and the Guyana Revenue Authority (GRA) as well as satisfy certain laid-out requirements. The process, he added, contained certain checks and balances, which allowed these three State agencies to check, verify and authenticate the information provided by the investor.
“I applied for the concessions, utilising the required procedures; the information that I provided were checked, verified and authenticated by the relevant agencies and I was granted the concessions for which I applied,” he explained.
Moreover, the hotelier went on to disclose that these were not the first concessions granted to him. In fact, he revealed that back in 2005-2006, he applied to the then Government for concessions, which were granted. These concessions were used in the expansion of the Sleepin International Hotel branch on Brickdam, Georgetown, Bacchus said. He added that at the time, Guyana was preparing to host its leg of the International Cricket World Cup in 2007 and the country was in dire need of hotel accommodation.
According to the hotelier, Guyana has continued to benefit from the investments which he has made utilising those concessions.
“The Sleepin chain of hotels has an international reputation of providing affordable accommodation in a quality environment with warm, competent and cordial staff. It provides employment, at this point in time, for over a hundred Guyanese families and it contributes millions of dollars, annually, in taxes,” he asserted.
Furthermore, Bacchus pointed out that unlike other hotels, the Sleepin chain never benefited from any movable or immovable asset from the State.
The letter penned by the hotelier was in response to an article headline in a local newspaper, which Bacchus said conveyed “the impression that Sleepin Hotel improperly, unfairly and perhaps corruptly benefited from concessions to which it was not entitled”.
As the applicant for those concessions and the owner of the Sleepin chain of hotels, Bacchus rejected the headline as “false and malicious”.