Companies linked to Holness filed nil tax returns despite millions in transactions, says Integrity Commission report

An investigative report into the statutory declarations filed by Prime Minister Andrew Holness has revealed that three companies linked to him which had transactions totalling hundreds of millions of dollars filed nil tax returns for 2021 and 2022.

A nil income tax return indicates that a company falls below the taxable income and therefore did not pay taxes during the year. 

In the 171-page report tabled in Parliament Tuesday afternoon, the Integrity Commission's Director of Investigation Kevon Stephenson raised tax compliance concerns.

The report said the prime minister is connected with or had financial interests in the three companies — Imperium, Positive Media and Estatebridge.

It said a forensic examination of bank accounts attributable to Holness and the referenced companies for the period January 1, 2020 to June 13, 2023, revealed intercompany deposits and withdrawals of $473,161,545.37 and $427,174,913.86, respectively.

The report said the financial statements provided by Holness indicate that in 2021, Imperium earned at least $5,121,105 in dividends, exchange gains and interest.

Still, Imperium, solely owned by Holness, filed a nil tax return for 2021 and 2022.

Positive Media's management accounts and statement of comprehensive income for 2021, submitted by Holness, indicate a total income of $20,069,697, the report said.

Notwithstanding, Positive Media filed a nil tax return for 2021 and 2022, indicating that the business had not engaged in any revenue-generating activity over the two years of its existence.

For Estatebridge's management accounts, the report said the statement of profit and loss account for the year ended December 31, 2021 shows an 'interest income' of $ 1,040, 625.

The report said despite this, Estatebridge filed a nil tax return for 2021, which means that the business had not engaged in any revenue-generating activity in that year.

Further, the report said over the period March 2021 to May 2022, a fourth company, Greenemerald, provided loans to Positive Media to the tune of $20,625,000 and appeared to be in operation during the referenced period.

Greenemerald filed a nil tax return for 2021 and tax returns declaring income of $355,100 in 2022.

However, in commenting on the report in the Lower House on Tuesday, Holness said as far as he knows the company he is directly associated with is compliant and filings are up to date.

But, Stephenson, in the report, said there is sufficient basis on which to make a referral to the Commissioner General, Tax Administration Jamaica (TAJ) and the Financial Investigation Division(FID) for a determination to be made as to the appropriateness of the filing of nil tax returns, and whether there is any financial impropriety on the part of the abovementioned companies.

“On a preliminary assessment, the tax returns filed by Greenemerald do not demonstrate that this company has the income generating capacity/has generated sufficient income to be in a position to provide loans to Positive Media of over $20,000,000.00 within the time frame it did,” Stephenson said.

Stephenson concluded that the filing of nil income tax returns for the years 2021 and 2022, on the part of Imperium, Estatebridge and Positive Media, in circumstances where those companies reported income and other business activities in their audited financial statements, poses significant tax compliance concerns.

Similarly, he said the filing of nil income tax returns and an income tax return with income of $355,100 by Greenemerald in 2021 and 2022, respectively, in circumstances where this company had, over the referenced period, provided short-term loans to Positive Media of over $20,000,000, and more importantly, appeared to be in operation, also raises serious tax compliance concerns.

“It is accepted and understood, that a company, though operating at a loss, may well be in a position to offer loans. The live issue here, however, is whether the named companies had any income and expenses over the relevant period which were not disclosed in their returns to TAJ,” Stephenson said.

He recommended that the report be referred to the Commissioner General, TAJ, for the necessary assessment to be made and, where required, for the appropriate penalties to be imposed.

A copy of the report has also been referred to the FID.

- Kimoe Francis

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