Prime Minister, Dr Ralph Gonsalves has sent a sharp rebuke to the head of a foreign company in Mustique. He said the company’s head has maligned the name of St Vincent and the Grenadines (SVG), in his correspondence about the reasons for their dissolution and liquidation.
The design, building and maintenance company, JAD Mustique, on January 3, announced plans to dissolve the company.
In that correspondence, the company said “ a combination of the political and economic climate in St Vincent and the Grenadines, COVID 19 and rising costs, have all combined over the last few years to put the company in a fragile financial position.”
Around 100 workers reportedly are losing their jobs as a result of this move by JAD.
The Prime Minister used the ‘Issue at Hand’ programme on Sunday, January 8, 2023 to reject statements made in the public notice put out by JAD.
Gonsalves called in to the programme after a caller expressed concern about the company’s closure and compensation for former workers.
“Don’t come and malign St Vincent and the Grenadines, and say the political and economic situation,” Gonsalves chided on Sunday.
He noted that “the political environment is stable, and the economy is on the uptick.”
The prime minister said that the “company had written publicly to malign St Vincent and the Grenadines.”
He, however, expressed confidence that the workers affected by JAD’s closure would be absorbed by the Mustique Company,”or by other sub-contractors in Mustique.”
It seemed that for some time now the James Archibald Design company in Mustique had been under scrutiny in relation to tax payments.
The Prime Minister revealed on Sunday’s programme that JAD has been “delinquent in its payment of the various taxes.”
He said this includes corporate taxes, value added tax, and others.
The prime minister recalled that it was in 2019, that certain matters relating to JAD came to his attention.
This was when James Archibald, the company’s chair, applied for Vincentian citizenship.
“I asked for a Special Branch report and for checks to be made on the company’s status in respect of various taxes and NIS payments,” the prime minister told listeners.
In 2020, when the initial report was submitted Gonsalves said it showed nothing in relation to the company’s liability for various taxes.
However, by the end of 2020, when all the necessary information was presented, Gonsalves said it was discovered that “ Mr Archibald’s tax liability was humongous.”
The company was in debt to the tune of close to $4 million for various forms of taxation in St Vincent and the Grenadines.
Based on this information, Gonsalves said he wrote a memo to the Cabinet Secretary in relation to Archibald’s application for Vincentian citizenship.
In the memo, Gonsalves, who has ministerial responsibility for citizenship, said that he will not give “favourable consideration to Mr Archibald’s application for citizenship.”
He added that in the memo the company was “flagrantly ignoring its obligation,” to pay various forms of taxation to the government of St Vincent and the Grenadines, including VAT and PAYE.
Although the Inland Revenue Department had advised later that Archibald was working on “resolving his tax indebtedness, the Prime Minister felt the department was being lenient with him, and that the matter should have been put to the Director of Public Prosecution.
However, Gonsalves said such a decision was “a judgement call” for the Comptroller of Inland Revenue.
As minister responsible for citizenship, Gonsalves said that on January 14, 2021 he then decided to halt the processing of Archibald’s citizenship application, “until the tax issues are satisfactorily resolved.”
Gonsalves said further on Sunday, that he was in touch with the Mustique Company throughout the investigation into Archibald’s level of tax compliance.
And, although his compliance level improved after certain action was taken by the Inland Revenue Department, this still was not “good enough.”
“There were still some things outstanding,” he said.
As such, the company’s application for a work permit for a UK national to join the staff in Mustique was denied.
The Prime Minister recounted that when this matter came before the Cabinet in July, 2022, he wrote on the memo “not for approval.”
By the end of 2022, the company had improved its status on some outstanding taxes, but there were still questions about its compliance in relation to the payment of Value Added Tax.
The company has been in operation in Mustique for the past 23 years.