Minister of Agriculture and Fisheries, Hon. Roger Clarke, on Wednesday May 30 disclosed that COMPLANT International Sugar Industry Company Limited received tax incentives as part of an agreement to purchase government-owned sugar factories.
Mr. Clarke, who was speaking during his contribution to the 2012/13 budget debate in the House of Representatives,cited a letter dated July 29, 2010, written by then Minister of Finance and the Public Service, Audley Shaw to the Board of Directors of COMPLANT.
The letter stated that the company will be granted relief from corporate income tax,withholding tax, customs duty and stamp duty or transfer tax, for 20 years.
Also, the company will be granted a waiver of the General Consumption Tax (GCT) in respect of the business or the purchase of agricultural goods, and materials, and all kinds of equipment and supplies in relation to the sugar manufacturing business.
The letter further stated that "for the avoidance of doubt, the incentives herein shall also be extended to the affiliates of COMPLANT provided the shareholding of these affiliates is majority owned by COMPLANT.
Mr. Clarke said he brought the issue to the public "in the name of transparency and to take into account that the other players in the industry had been complaining that the playing field isn’t level."
"Even with some of the others, who bought into the divestment process, their arrangements are somewhat different. At a later date I will bring to this honourable House what those arrangements are," Mr. Clarke said.
Opposition Spokesperson on Transport and Works, Karl Samuda, in his contribution, informed that the tax waivers were approved by the then Cabinet.
"The fact of the matter is there is nothing unusual about this and in fact it is something that should not be criticized but embraced,” Mr. Samuda said.
As part of the privatisation of the sugar industry, the Government had sold the Frome, Monymusk and Bernard Lodge Sugar Estates to COMPLANT for $835.9 million, including $765 million for the factories and $70.9 million in lease payments.