NEGRIL, Westmoreland – Opposition spokesman on finance Audley Shaw has called for reform of the tourism tax regime to ease the financial crunch on the small hotel sector. “The playing field for small hotel sector is not level right now,” said Shaw Saturday.

“Those small hotels that are in existence for over 10 years now, are now no longer eligible for the incentives so they are required to pay all of the customs duties, all of the property tax … in other words, they are no longer subject to any kind of incentive.”

Government, he said, has to demonstrate flexibility and allow the small hotel sector to enjoy the tax holidays in perpetuity.

“We believe that after 10 years, any hotel that is serious about business would have to retool, and we believe that retooling is not something that ought to be taxed,” said the Jamaica Labour Party officer, addressing the 23rd anniversary dinner of the Negril Chamber of Commerce at the Negril Hills Golf Club.

Indicating that capital was too costly, Shaw said the sector was borrowing at between 22 and 28 per cent, adding that it was almost impossible for the small hoteliers to successfully retool at such high rates of interest.

Government should make funds available at rates of 5-7 per cent five, he said, but warned that the government would not be able to do so until it reduces its existing level of borrowing.

“You would no be able to get the money until the government reduces its appetite for borrowing and they will have to substitute the level of borrowing with earnings,” he said.

Over the past few years, there have been persistent calls from tourism interests for the government to review its tax regime.

Earlier this year, government senator Noel Sloley proposed in a Senate submission, the rescheduling of debt owed by the small hotels to ease severe cash flow problems which, he said, had been undermining their efficiency.

In March, Negril Chamber president Wayne Cummings also highlighted the need for greater assistance to the sector, particularly against the background, he said, of competition from the larger hotels, a lack of incentives, and aging physical facilities.