BHTA VAT worry despite relief
THE Barbados Hotel & Tourism Association (BHTA) is worried that Value Added Tax (VAT) relief Government recently offered the tourism industry may just be “a stay of execution”.
BHTA president Colin Jordan raised the issue yesterday when he addressed the association’s fourth quarterly general meeting at the Lloyd Erskine
In his presentation of the 2010-11 national Budget, Minister of Finance and Economic Affairs Chris Sinckler increased the VAT by 2.5 per cent, but said the increase would not be passed on to the tourism sector.
However, Jordan told the meeting: “. . . We would note, if we listened carefully, that increases in the rate of VAT on accommodation supplies have not been completely ruled out by Government.
“The term that comes to my mind, which I probably should not use, is that we may have had a stay of execution. Execution is such a terrible word in this context, as we have constantly shared with Government the fact that we cannot afford to stifle or destroy the main pillar of our economic growth.”
Jordan spoke against the backdrop of complaints from hoteliers and other tourism service providers that any VAT increase would further damage the industry’s chances of recovering from a drop in tourist spending.
Tourists are said to be spending less in hotels, restaurants and attractions and with car rental agencies.
Jordan underscored the importance of tourism as a foreign exchange earner to a small, open economy like Barbados.
He urged politicians not to get caught up in suggestions by some about taxing locals versus taxing visitors or about taxing tourists “in the same way or more severely than we residents are taxed”.
He added: “This is the time for our political leaders to educate the populace about the real issues.
“We wish to restate our position that VAT on the services provided to visitors by our direct tourism services should not be subjected to the increase in the rate of VAT on standard rated supplies.” (TY)