Home News Local news TWO IDC TAX BENEFICIARIES TO BE EXAMINED

TWO IDC TAX BENEFICIARIES TO BE EXAMINED

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Two unidentified Industrial Development Commission tax beneficiaries may be ordered to pay retroactive taxes for violating the terms of their contracts.
According to Frandelle Gerard, acting director of the IDC, the companies violated every aspect of the IDC law, including curtailing business while continuing to receive tax benefits. The companies could be found liable for tax payments for the periods of non-compliance.
Meanwhile, Sen. Adlah "Foncie" Donastorg called on Gerard to investigate another IDC beneficiary, the Virgin Islands Telephone Corp., for allegedly abusing its tax breaks. Vitelco, owned by Innovative Communications Corp., receives nearly 100 percent, across-the-board tax breaks. Donastorg said he has received complaints from Vitelco workers who allege that company management is hiring employees from other ICC subsidiaries.
"They are redistributing personnel to take advantage of the tax breaks," Donastorg said. "They put subsidiary employees on the payroll of Vitelco to increase the expenses of Vitelco to increase the rate of return."
Gerard said she has notified the V.I. Labor Department about Donastorg’s concerns.
Gerard said that in order to better monitor compliance of all IDC beneficiaries, the commission is forming a compliance committee with the Attorney General’s Office, Internal Revenue Bureau, Department of Licensing and Consumer Affairs and the Lieutenant Governor’s Office.
"It is a partnership with other government agencies that have more resources than we do," she said.
Gerard said the IDC has limited authority to discipline beneficiaries that don’t comply with the terms of their contracts. The commission counts on government agencies with greater enforcement authority to levy penalties for non-compliance, she said.
"The only thing the commission can do is move to revoke or suspend benefits," Gerard said.
In the case of the two companies alleged to have violated their benefits contracts, Gerard said they will be identified at a future show-cause hearing.
"When the time is right . . . in public hearings, at that point names will be made public," she said.
In the meantime, Gerard said the IDC is reviewing the records of all IDC beneficiaries to check compliance with the terms of their tax benefits.

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