Joe Johnson: “Tien’s AUC left Montserrat because of tax issues”

POSTED: 09/23/13 1:03 PM
Joe Johnson, Vice president of Operations and Strategic Development at the University of Statia School of Medicine. Photo website Usesom.

Joe Johnson, Vice president of Operations and Strategic Development at the University of Statia School of Medicine. Photo website Usesom.

St. Maarten – The American University of the Caribbean did not move from Montserrat to St. Maarten because of the eruption of the Soufriere Hills volcano in July 18, 1995. “They left Montserrat because of tax issues,” says Joe Johnson, adding that the proof is in the pudding: “The AUC bought the land for its campus in Cupecoy already in 1993.”

Johnson is currently the Vice President of operations and strategic development at the University of Sint Eustatius School of Medicine, but he spent ten years of his career at the American University of the Caribbean School of Medicine, where he was the Director of Physical Plant and Housing and Liaison to Government and Labor.

In 2011 the latter relationship ended abruptly after ten years when Johnson had – as was his duty – prepared the campus for an upcoming tropical storm. When he was done, he wanted to go home to make sure his own house was fully prepared for the storm, but the dean, Dr. Ron Testa, told him that he had to stay on the site.  “Really? After working here for ten years I cannot go and make sure my house is safe?” Johnson said he told Testa, before walking out the door, never to come back.

Under the ownership of Paul Tien, the medical school in Cupecoy certainly contributed to the island, Johnson says now. “But the major contribution was rent, food and leisure for the students. But who owns the units that these students rent? And did they pay turnover tax?”

Johnson says that medical schools are great tools for marketing Caribbean islands, if only because students’ families come and visit. “But the big numbers are in wage taxes and profit taxes.”

Johnson knows that the previous owners of the American University of the Caribbean obtained a 10-year tax holiday from the government, but he is unsure about what happened afterwards. “Was it renewed? I don’t know.”

Part of the deal with the tax inspectorate was, Johnson says, that faculty members were exempt from paying social premiums. “Most of them do a tour of three to five years, so they will never file a tax return here or collect a pension,” he says.

When Johnson’s wife Lockie, now the dean of Basic Sciences at the University of Sint Eustatius School of Medicine, got into a dispute with the AUC over her contract, it appeared in a court case that the university was paying part of the faculty salaries through an entity in the Cayman Islands, thus ducking wage taxes in St. Maarten.

Johnson says that this was a necessary construction. “In the BES-islands wage taxes are 34.5 percent; that is reasonable. But in St. Maarten it would have been near 50 percent. With such levels of taxation you won’t be able to attract faculty, if you take half of their salaries.”

Did the American University under its former ownership pay its fair share to St. Maarten? Johnson doubts it. “We have never been able to convince Tien to sponsor a scholarship for a local student.”

In that sense, the AUC under Tien remained the odd man out in St. Maarten. The university was (and is) there, but it felt as if it did not belong. “We need to be better corporate citizens,” Johnson says. “The better we fulfill that role, the better we will look as a group.”

The Statia School of Medicine has left Statia and is now operating from the building that previously housed the Montessori School in Cole Bay. “We will provide two full scholarships to qualified locals and we offer reduced tariffs for local students,” Johnson says.

 

 

 

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Comments (1)

 

  1. Selena says:

    I had to come back to this article. I’ve learned that Mr. Johnson was fired or resigned fron SESOM. Coincidence or what goes around comes around.