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Tourism in state of uncertainty — Bartlett

BY BALFORD HENRY Observer semior reporter balfordh@jamaicaobserver.com

Friday, July 13, 2012    

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OPPOSITION spokesman on tourism and travel service development, Edmund Bartlett, says that the taxes imposed on the tourism industry recently have placed Jamaica among the highest-taxed destinations in the region.

Speaking in the sectoral debate in the House of Representatives Tuesday, the former tourism minister said that while the Opposition recogniaes the need for the sector to contribute more, "it cannot be done to the detriment of the industry, which is the proverbial goose that lays the golden egg for the Jamaican economy".

According to him, with1 taxation being a critical growth determinant for tourism, the tax policy must be equitable, positive and simple.

"The recent budget presentation departed from these basic principles and threw the sector into a state of deep uncertainty and bewilderment. Critical to all of this is that the government itself retreated and reversed itself in so many areas that the stakeholders in the sector are still trying to determine what the new tax measures are. This has implications for planning, pricing and Return of Investment (ROI) factors that influence investor decisions," Bartlett stated.

"The new taxes have placed Jamaica among the highest taxed destinations in the region. We do not want to be priced out of the market. What we cannot afford is to have a tax policy that becomes so regressive that it chips away further at the sector's competitiveness," he added.

Bartlett noted that the industry already has Departure tax — US$20; TEF (Tourism Enhancement Fund) Tax — US$20; Airport taxes — US$15; Travel Ticket — US$20; and Hotel — US$4.

"A family of four coming to Jamaica for an average stay of seven nights will have to pay US$356 in taxes. If these visitors are coming from the UK with a UK Air Passenger Duty APD of 92 pounds (sterling), we are around US$480 in taxes. That can buy them a week in Cancun, Punta Cana or Cuba," he explained.

"If we factor the taxes on inputs such as alcohol, meats and electricity, we are eating away at the gross operating revenues of stakeholders. This comes against the background of falling Average Daily Rates (ADRs) resulting in discounting or adaptive pricing and reduced revenue per applicable room," he pointed out.

"All of this, Mr Speaker, make an investor quiver, as he will have to think twice before putting his hard earned money into Jamaica. Nothing destroys the competitiveness of a destination than regressive tax policies," Bartlett commented.

He said that the Government has to lay down an appropriate way to tax the sector, without destroying it.

"The problem is that we do not know how to tax the tourism sector. Tourism Satellite Accounts, a way of measuring and quantifying the impact of tourism on the economy, represent a good source for accessing the right data to guide us carefully. The Minister should drive this aggressively," he suggested.

"In the end the government must make up its mind as to whether tourism is a part of the export sector or not," he concluded.

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