KLAS bidder gets $15 million tax waiver

By George Jude, Freelance Writer

Stewart

SUCCESSFUL BIDDER for KLAS FM 89, Wilmington Corporation has received a tax waiver of $15 million in principal and penalties from the Ministry of Finance.

The waiver, which was a response to the company's application for a waiver of $22 million of tax liability, most of which came in the form of a penalty.

So said managing director and owner of Wilmington Corporation, Alston Stewart, who told Wednesday Business that following the waiver, the company's tax liability to the government was down to $7 million from the original $22 million.

In an earlier interview with Wednesday Business, Mr. Stewart had confirmed that he had applied for a waiver of the penalty portion of the $22 million statutory debt, which he said was mostly a penalty. At the time he said, while he would be honouring the "people-sensitive taxes such as PAYE and GCT," he was looking for relief on the penalty portion of the debt.

"We received a letter from the Ministry of Finance about five weeks ago setting out its response to our application for a waiver of $22 million of tax liability, most of which was penalty but we received $15 million, leaving us with $7 million of tax liability to pay to the government," Mr. Stewart said.

A letter from the Ministry of Finance, responding to Wilmington Corporation's application said the company got 50 per cent waiver on the principal amount owed on Heart Trust contributions; 50 per cent waiver on the principal amount of PAYE owed and full waiver on the PAYE penalty; and 50 per cent waiver on the principal amount of GCT owed and full waiver on the GCT penalty owed. The letter said all others such as NIS, NHT will have to be honoured. Mr. Stewart said, while the waiver was a great help "it has been overshadowed by the certain loss of $22 million of receivables which were also taken over but which have been found to be uncollectable".

Mr. Stewart said his company had hoped to collect $13 million of the bad debts, which meant that he would have to invest an additional $13 million in bringing the radio station to a ready state. "But as it happened we will have to invest 100 per cent more as we will only collect $188,000, which was committed but the rest of the $22 million is uncollectible," Mr. Stewart said.

In explaining the reason why the $22 million is uncollectable, Mr. Stewart said two factors were at play: "Firstly," he said, "some payments were made to the station by persons but the payments were never recorded." Secondly, contracts overran their original schedule of radio commercials but there was no documentation from clients authorising the extra amounts.

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