Last night we told you about a leaked (See GOB Pays E-com's Stamp Duty') Ministry of Finance letter, which shows government paying $2.2 million to cover the stamp duty charges arising from the transfer of shares to E-com and Sunshine Holdings Limited. It's a very unusual transaction because it has the government paying a tax to itself and doing so on behalf of a declared Michael Ashcroft company, E-com and an alleged Ashcroft affiliate, Sunshine Holdings Limited.
What makes the letter even more remarkable is that it has senior finance advisor Joe Waight describing E-com and Sunshine as linked companies, flatly contradicting the Prime Minister's avowed declaration that Sunshine is not an Ashcroft company. So what does the Leader of the Opposition think about this apparently sweet deal for Ashcroft? Well, not too much, Barrow told us today, that, though irregular it's not illegal.
Hon. Dean Barrow,
"In any transaction between buyer and seller, where stamp duty arises, it is for the buyer and the seller to determine who will bear the burden of the stamp duty. They can either share it or they can decide, as a part of their commercial arrangement, that the buyer will pay solely or the seller will pay solely. So there is nothing illegal about it. But since you are talking about a situation in which government is the seller I believe that the public has the right to expect that the purchaser would have paid the stamp duty.
Basically its revenue neutral so you kind of wonder why the paper transaction because as you said government doesn't pay tax so it doesn't make a great deal of sense. But the bottom line is, I think that it is a political and economic decision taken by government which people have a right to condemn. But clearly it is not illegal."
And while Barrow believes that it's a revenue neutral transaction, others say that it's hardly that. Finance experts we spoke to point out that government is not subject to tax, so if it is taking on this $2.2 million tax, in so doing it is relieving Ashcroft's company of it's tax burden, making it distinctly revenue positive for the British billionaire. And it's the opposite for government, which loses tax revenue that should have been paid by Ashcroft's company, thus forsaking much needed revenue.
