Friday, April 14, 2006

BVI stamp duty fraud in details

It is suggested in the BVI Public Accounts Committee report that a number of companies deliberately avoided payment of the correct amount of stamp duty on property they acquired, and thus reduced BVI Government revenues by hundreds of thousands of dollars. The committee investigated transfers of property for between 250,000 and $500,000 from June 18, 2004, to June 19, 2005, and property selling for more than $500,000 during the period June 1, 2004, to June 14, 2005.

The properties about which questions arose are the Virgin Gorda Yacht Harbour, the Treasure Isle Hotel, Village Cay Marina and R. J. Development Limited's 14.8 acres in west central Tortola. The Virgin Gorda Yacht Harbour was sold by Little Dix Bay Hotel for $3 million. Village Cay Marina was sold to Village Cay Marina Enterprises Ltd. for $2.1 million. Virgin Islands Resort Limited sold Treasure Isle Hotel for $1 million. R. J. Development Limited bought the west central property from Clarence Edgar Thomas and Bernice Louise Thomas Heyliger for $600,000.

All the above-mentioned bargains with the BVI property are estimated by the committee as "unreasonable and the considerations grossly undervalued, done to deliberately avoid paying the correct stamp duty, and in that case defraud the government of revenue legally due and payable." The committee also said that it is not just a problem of collecting a charge on the cost of the property, but it is all done to ensure that a fair and reasonable valuation is declared.

The committee names the directors of Virgin Gorda Yacht Holding Limited as Meade Malone, Romney Penn, Verlin Crabbe, Franka Pickering and Rita Frett-Georges, with members Sage Yacht Harbour Enterprises Limited and Virgin Gorda Yacht Holdings; the directors of Village Cay Marina as Anthony Esposito, with members Village Cay Holdings Limited and Gerard St. C. Farara; the directors and members of Village Cay Marina Enterprises Limited as Glenn Harrigan and Vanburn Maduro; and the director of R. J. Development as Robert Wong, with members Wong and Edward and Cheryl Stroh.

One thing is to find the problem, another thing is to make all reasonable actions to avoid such wrongdoings in the future. It can be done by improving appropriate BVI legislation norms as well as doing other preventive actions.

Main recommendations from the Committee are to establish a Commission of Inquiry for investigating this matter and deciding on actions, and to make the update of the Stamp Duty Act, which is 111 years old, as soon as possible, bringing it in accordance with the Conveyance and Law of Property Act Cap. 220.

No comments: