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OBA says Gencom tax concessions are a bad deal

Seeking answers: Cole Simons, the leader of the Opposition One Bermuda Alliance (File photograph)

A war of words has broken out between the island’s two political parties ahead of today’s parliamentary debate on the Fairmont Southampton Hotel Act.

The bill, tabled by Tourism Minister Vance Campbell during a special sitting of the chamber two weeks ago, will give developers of the shut-down resort tax breaks for the next 15 years

Under the proposed law, developers Gencom will be entitled to full relief from customs duty on building materials, furnishings, fixtures and equipment needed for the redevelopment of the hotel, as well as hotel occupancy tax. Land tax will be exempted for ten years.

But the Opposition One Bermuda Alliance has accused the Government of keeping details of the deal under wraps.

In an opinion piece in today’s Royal Gazette, Cole Simons, the OBA leader said: “The Burt government tells us this is a good deal for Bermuda, but how can we tell? There was no public consultation, there are no numbers, no objective, and no independent view.

“The OBA has asked for details from the Government on multiple occasions this year, with no response.”

Mr Simons claimed that David Burt, the Premier had previously promised that the Government would provide more details when the Bill was tabled – but then failed to do so.

According to OBA calculations, the concessions will cost the Government about $128 million in lost tax revenue in the next 15 years.

Mr Simons added: “That money could have been used to pave roads, care for the elderly, or pay down the island’s astronomical debt.”

Mr Simons said the OBA was not opposed to the principle of tax concessions, but said they should be limited to ten years.

Last night the Government hit back, accusing the Opposition of desperation.

In a statement, Mr Campbell pointed out that the former OBA administration had made similar deals with developers – but a lack of due diligence had cost the taxpayer hundreds of millions of dollars.

Mr Campbell said: “The Opposition Leader knows that a closed hotel provides zero dollars in tax revenue and that the reopening of this hotel will increase revenue to the Government and provide jobs for the country while supporting increased airlift and visitors to Bermuda.

“The Opposition also must have short memories as they passed a special act for St. Regis that extended tax relief to more than was allowed by law – because they understood what was necessary to get hotels built in Bermuda.”

Mr Campbell said he relished “leading tomorrow's debate on behalf of the Government”, adding that the resort will provide 650 jobs during construction and 800 jobs when the hotel reopens.

He said: “The Opposition wants to have it both ways, but they can't. They either support the reopening of the hotel or they don't. If they support the reopening, they will support this bill tomorrow.“

Also on the Order paper for today, Mr Burt will give a statement on fuel pricing. The Government has frozen the cost of petrol at the pump for the past two months.

Kim Wilson, the Minister of Health, will seek a further extension to Covid-19 public safety measures, while Jason Hayward, the Minister for Economy and Labour, will table the Department of Financial Assistance 2021 annual report.

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Published May 06, 2022 at 7:52 am (Updated May 06, 2022 at 9:39 am)

OBA says Gencom tax concessions are a bad deal

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