$40B HOLE

The financial standing of the University Hospital of the West Indies (UHWI) is now under scrutiny following revelations yesterday that the teaching institution has a ballooning tax debt amounting to tens of billions of dollars.

Acting chief executive officer of the UHWI, Eric Hosin, told members of Parliament’s Public Accounts Committee (PAC) on Tuesday that the hospital owed Tax Administration Jamaica (TAJ) more than $40 billion in taxes.

He said $18 billion of this amount is the principal sum owed and the balance represents interest and penalties.

In an earlier appearance before the PAC, Hosin pointed out that one of the contracts flagged in the auditor general’s performance audit of the hospital was to produce an operation and turnaround plan to address concerns about the viability of the hospital “from a financial standpoint because at this moment it is not in the best of shape”.

The consulting firm, William Pragmatic Limited, which was supposed to deliver its turnaround plan by the latest early 2025, only submitted a draft document in February this year, more than a year after receiving US$93,000 – or half of the money – to prepare the plan, and also one month after the auditor general flagged the issue.

Lamenting the sum owed by the institution, committee member Lothan Cousins noted that ordinary Jamaicans are dragged before the courts by TAJ for their tax obligations while the UHWI owed this massive sum over an extended period.

Placing the magnitude of the sum owed into context, committee chairman Julian Robinson quipped that the principal amount due was similar to the Government’s $18 billion new tax package for the current fiscal year.

In a related matter, Hosin also admitted that the institution has been operating without its own tax compliance certificate (TCC) for several years. He said the UHWI, which now has a temporary TCC, has been using the certificate of its private wing for years.

He told the committee that, since January of this year, the hospital has been importing items through the Ministry of Health and Wellness.

“We recently received a temporary TCC because of the nature of our business and the urgency in terms of the medicines that we need to import into the island and the speed at which we need to get it in,” he added.

Asked Robinson: “Given that you are not able to import items on your own behalf, would that give rise to the tax exempt status being provided to third-party companies to bring items in on behalf of the hospital?”

However, Hosin declared that under no circumstance should the hospital use its tax exempt certificate to import items for any third party, not even a government ministry.

“It must be solely for the use of the hospital and items purchased by the hospital,” he stressed.

The UHWI had named four companies which the auditor general signalled benefitted from the misuse of the hospital’s tax exempt status to import goods into the country. The companies are Supreme Laundry Services, The Willman Sales Company Limited, Scientific Medical Services, and the JACDEN Group of Companies.