Prime Minister Ralph Gonsalves has defended the 15-year tax break and other major concessions that his government has given to Rainforest Seafood SVG Ltd., a Jamaica-headquartered firm which says it will invest EC$10 million in a fish processing facility at Calliaqua.
“I just want to say that almost all the concessions given to Rainforest Sea foods are concessions given to manufacturers in this country and to hoteliers, people who invest,” Gonsalves said Sunday on WE-FM.
“Well, if you bring that in a hotel, you get a similar length of concession. You also get for hoteliers and manufacturers – and these people we must remember, are a packaging entity. Cleaning and packaging, in other words, they are taking the raw materials and putting it together in a way for the market. And they’re bringing with them expertise and they are bringing with them also markets.”
The prime minister suggested that some persons were commenting because his government did not approve their application to operate the existing fisheries facility at Calliaqua, which is being run by fisheries cooperative in that town.
He noted that Rainforest Seafoods has similar businesses in other parts of the region.
“A manufacturing entity is coming in; they get the raw materials for the building duty free. The same thing with an hotelier.”
A Nov. 14, 2018 Cabinet memo obtained by iWitness News shows that the government has agreed that no taxes or withholding of any kind whatsoever will be levied on Rainforest Seafoods’ income, profits and capital gains for 15 years.
The 15-year period begins when the company informs the government in writing of the commencement of its commercial operation.
No customs duties, value-added taxes or duties will be imposed on any building, materials and finishing, fixtures, fittings, plant, machinery, equipment, tools, spare parts, and construction equipment imported during the construction phase of the project.
The company will receive duty-free concessions on the importation of two freezer trucks, three pickups, two freezer forks, two outside forks, three electrical pallet jacks (walkies), two reefer containers for transporting products to the airport, and boat engines for two boats mentioned.
The renewal of the duty-free concessions on these items will take place four years after the date of their importation.
Rainforest Seafoods will also receive duty-free concessions on the importation of one tractor head, two chassis, and two boats to be used for the transporting product and fishermen’s supplies between the islands of St. Vincent and the Grenadines only, the memo says.
Gonsalves said that before his government came to office — in March 2001 — and even during the earlier part of his administration, if a manufacturing enterprise was set up, they would get duty-free concessions on the building materials and equipment but not on spare parts.
He said that policy was changed five to seven years ago and he announced it in a Budget Speech.
The prime minister said that if someone has 10 industrial sewing machines and want to make clothes, while it is useful to give them the concession on the machines, they have to be given on the cloth also.
“But that never used to happen. All packaging materials you get the concessions on them. Now, the hotels get on their equipment, the hotels get on their furnishings. They hotels will get on the big industrial stoves and so on. They will get on all their furnishings. They wouldn’t get on their pots and pans.”
The prime minister said that Rainforest Seafoods, by virtue of the agreement, are not allowed to fish in St. Vincent and the Grenadines, adding that the boats on which the company is getting the concessions is to transport seafood from one part of the country to the next.
“They have to buy from the fisher folk. We have a lot of lobster and fish and we have to be careful with the conch.”
“The question for the refrigerated transport, when they have the live lobsters, they need something to take it from there to take it to the airport,” he said that concessions are given on all special service vehicles used in the manufacturing sector.
He noted that persons have raised questions about the potential impact of Rainforest Seafood’s’ business on similar outfits in Bequia and Owia.
“Those competitors can do their fishing you know,” Gonsalves said.
“And in Bequia, the building which was there, the guys have it at peppercorn rental. Out at Owia, is a 30-million-dollar facility, including gas station, which is peppercorn rental, too.
“And their support equipment in Bequia, I think one the refrigerated trucks which we got from the Japanese, I think that is being used there. And Vincentians are involved in that company but also an American company is involved in that too.
“So you know, if we are having a discussion, let’s have a discussion intelligently on the fact, nuh. Fellas know me. They think I would go and give away the shop.”
He said that one of the things that he insisted with Rainforest is that they do not fish at all.
“Because I want the fisher folk to make money. Already, the price of lobster has gone up because of the activity in Bequia at that plant and also at Owia.”
Gonsalves said that while his government hopes that Rainforest Seafoods stays in SVG, if they leave, the buildings they construct will remain.
He said his government is looking into investing in two or three trawlers.
“We have a lot of fish there, but, look, it’s not the Taiwanese that coming into our waters and fish but vessels from Grenada and St. Lucia,” he said, adding that that is one of the reasons why his government purchased a 42.5 metre offshore patrol vessel for the Coast Guard.
The prime minister said he knows a small group that was interested in getting the Calliaqua Fisheries Cooperative facility and, for various reasons did not get it.
“And some of the local people, I know, are angry because Rainforest are coming there now to build. Well, they could have come and build… But people must stop using their personal or group agendas and look at the issue of national development for the country. And I could answer and defend anything the government does.”
He said if the government makes a mistake, “I would say I think our judgement was not as good as it should be on this or that issue…
“But I want the young men and young women who are listening to me to get into fisheries. It’s a big area. Just like how I encourage the young men and women to get involved in fruits and vegetables in a scientific way and also to get into animal husbandry. Last year it’s 19.5 million animal husbandry contribute to the GDP of this country — more than the fish landings. But, of course, fisher folks will sell fish at sea… So what we caught is not necessarily what we land… But you will have a reason now to bring it here and sell it and get a good dollar for it,” the prime minister said.
Similar concessions are given in the richest countries of the world.
Nearly all professional sporting arenas and playing fields not owned by the state are built with huge government concessions everywhere in the world even though most economists consider such concessions wasteful from a developmental perspective.
So why are they granted? Simply because competition for sporting events between different cities or countries makes them inevitable.
Recently Amazon, one of the largest companies in the world, pulled out of a plan to build a huge distribution facility in the New York City area because of a small public outcry about the concessions offered them even though nearly all knowledgeable observers agreed that the city would receive a net benefit in job creation and other growth from these concessions. The losers will be the people of New York and the few local politicians like the capitalist hater, OAC, that opposed the deal.
Rightly or wrongly, our Prime Minister, feels that Rainforest Seafoods will add value to our economy.
lLOL @ capitalist hater lmao………..Ben stop misrepresenting OAC , also thats not the real reason Amazon pulled out . Do you actually think for a minute that this no name freshman congress woman can scare Amazon from going forward with a deal that can net it billions if they really wanted to go forward ??
Mr. PM the problem I have with this deal and many others in the past with present and former Governments of SVG . is not only we give away too much concessions , but WE DO NOT GET ENOUGH BACK IN RETURN as a country . Just jobs and and some INS payments is not sufficient . I hear that the job number for employment from this deal/investment is a measly fifty jobs or so . point B) populations in our country and other neighboring countries only see the obvious investments of jobs for locals BUT THESE COMPANIES SHOULD AND MUST BE MADE TO REINVESTED PORTIONS OF THEIR PROFITS BACK INTO THE COUNTRY INFRASTRUCTURE AND DEVELOPMENT .
for too long investors and foreign entities are allowed to reap rewards and take all of their profits out of the country without any obligations to give back to our locals from whom they reap all those benefits from .
So Mr PM please stipulate these VERY IMPORTANT MEASURES INTO THESE CONTRACT AND AGREEMENTS . if they are not already in such contracts RIP IT UP AND AMEND SUCH CONTRACT to stipulate clauses to protect and benefit the country .
INFRASTRUCTURE THESE COMPANIES THATS ALLOWED TO REAP THE BENEFITS OF OUR COUNTRY SHOULD BE …..REINVEST IN OUR AIRPORT , SHIP PORT, ROADS, SCHOOLS ,AND HOSPITALS
Stop making silly ignorant statements AI
Agreed.
If you do the sums EC$20 million they propose spending on lobsters annualy represents at least 2 million pounds of lobsters which on average represent almost 700,000 lobsters.
Anyone who thinks our waters can sustain that for more than a couple of years must be called Gonsalves.
The Lobster fishing season is from September to April , with May to and including August as closed season to allow for breading and reproduction. That season needs a month of none fishing at each end added. The closed season should include April and September. Even then I hold out no hope for our lobster stocks Once those lobster stocks are gone so will Rainforest be gone.
Over the years locals and even professional fishermen have caught lobster out of season, at least we can be sure that this company will not process lobster out of season. Unless of course Gunzy has given them an all year open season as a concession. Any shortening of the closed season for lobsters will be catastrophic.
Jolly my friend you still haven’t elaborated on how my statement is ignorant except for just merely making the assertion.
Local fishermen using there adopted method of treating the fish once caught will be unacceptable to a processor, especially an export processor.
Our fishermen go to sea without ice and keep the fish laying in the bottom of their boats covered with a dirty stinking piece of old house carpet to keep the sun off. They then throw sea water over the carpet at intervals.
With lobsters that does not matter as long as they are landed live, ice will actually kill them.
The fish landed without the use of ice is already on the way to being spoiled, and the dirty carpet introduces harmful bacteria.
That is OK for local consumption but not for a processor and not for export.
Our fishing pirogue’s are designed for near water fishing and are unsuitable for distant water fishing. Small trawlers are best suited for that purpose.
Our distant waters are still being raped by privately owned Taiwanese fishing boats [and others] some registered with the Vincentian flag. The problem is that the distant water is where the fish breed on the banks there, and the fish then migrate to our near waters for our fishermen to catch. Once those fish are taken by foreigners in our distant waters it affects the catches in our near waters. Our government has allowed the rape of our distant water fishing grounds to go on now for years.
Before the deal was done with Rainforest there should have been a feasibility study done to determine the affect of commercialisation on such a large scale to our fishing industry. Will it cause over-fishing and the dwindling of fish-stocks, will it increase the price to local consumers beyond affordability?
But in the usual way lets just do it regardless of consequences, that is what happened at Buccament and Argyle and just about every project. We have seen foreigners destroying what we have and ruining our name internationally. I am not saying that is what Rainforest will do, at least I hope not.
Almost everything that is done by this government brings folly on SVG, lets hope this is not another instance of the same as all before it.
The PM is being disingenuous, some local businesses get duty concessions but which local businesses get corporate tax concessions, forever? But the real point in all of these deals is where is the economic rationale? Airport, Mt Wynne hotel loan, Holiday Inn, Rainforest, etc, etc – show the economic analysis. We just look for the headline but the sugar high is shortlived before we need another hit.
Yes Luke. Overall the very high taxes of Saint Vincent are what keep prices VERY HIGH and mostly why the country remains undeveloped. Some entities get very good tax incentives. The problem is that the tax breaks are not doing what they should be doing….encouraging investment! This is because they are not forever and they are only for the entities with lots of money. I come from Seattle Washington and I grew up during the “big boom” time where Amazon, Microsoft, and many many more entities started and grew or expanded such as Boeing. This happened because the VERY LOW tax rates APPLIED EQUALLY TO EVERYONE! In Saint Vincent only the big money people get the breaks and everyone still has to (usually) pay the HUGE,HUGE, HUGE Customs duties. As I have observed in the past: I do not know if it is still the case: But even if you have a concession Customs still tries to charge you the max and makes those with concessions work really hard in order to actually get the concessions they are allowed. Not to mention that when these companies in Seattle had to use Customs they were able to clear items in an hour or two. In Saint Vincent it takes days, sometimes weeks!!!!! All of those efficient places on earth, Singapore, Germany and many others would have a heart attack seeing how much stupid red-tape there is in Saint Vincent, and how very slow things are here.
Why would any global investor want to come here and pay more to get less?
If we had fair tax rates and FOR EVERYONE, prices could be lower, we would not need to employ a big army in Customs, (as there is more Customs workers per capita in Saint Vincent than any country on earth!) there would be more investment, Those with great ideas would have wings for thier projects (instead of never even getting a start) and our business sector would be more motivated. We would actually go places instead of constantly going backwards.
In a nutshell the high costs and inefficiency of SVG is why we are failing. In that department government is doing a very poor job indeed. Just look at Liat for an example!
Well said.
There is never an objective feasibility study or impartial due diligence analysis for any of these projects. Never, ever.
The only question this PM, like the previous one, ever asks about a project is what are its electoral implications.
If lots of votes and a certain return to power is the answer to this question, the project goes ahead regardless of its feasibility or costs.
Welcome to the post-colonial Caribbean.
Luke just so as Vincentians know what you are writing about when you wrote “The PM is being disingenuous”
synonyms: dishonest, deceitful, underhand, underhanded, duplicitous, double-dealing, two-faced, dissembling, insincere, false, lying, untruthful, mendacious; not candid, not frank, not entirely truthful; artful, cunning, crafty, wily, sly, sneaky, tricky, scheming, calculating, designing, devious, unscrupulous; informalshifty, foxy; humorouseconomical with the truth, terminologically inexact; archaicsubtle, hollow-hearted; rarefalse-hearted, double-faced, truthless, unveracious.
David I am not sure why you mention post-colonial, all be it that is the era that we are in. But colonialism has nothing whatsoever to do with feasibility studies or the lack thereof. Because during British rule they were absolute sticklers for the enforcement of laws and rules. The British would have demanded studies and they would have most certainly been done.