KINGSTON, Jamaica — The Jamaica Hotel and Tourist Association (JHTA) says suggestions that the Tourism Enhancement Fund (TEF) should contribute 50 per cent of its receipts toward financing the Government’s $1.5 million income tax break is well intentioned but does not fall within the mandate of the fund.

“The funds from TEF are essential in maintaining the competitiveness of the tourism sector, its growth and other critical initiatives such as the Tourism Linkages Hub which aims to achieve a reduction in imports and to better build the absorptive capacity of Jamaican businesses to benefit from tourism” the JHTA said in a release Tuesday morning.

The suggestion that money from the TEF should be diverted to fund the tax package would be counterproductive as it would mean that replacement funds would then have to be provided by the Consolidated Fund, which comes from tax payers themselves, the group of tourism stakeholders argued.

The JHTA was responding to suggestions by chairman of Sandals Resorts International Gordon ‘Butch’ Stewart published in the Jamaica Observer on Sunday, April 10.

According to the JHTA, the decision in 2004, when the TEF was established, was to have a dedicated fund paid directly by visitors to the island on their airline tickets to maintain the tourism product and fulfil the mandate of the Tourism Master Plan to build out a tourism industry that has both competitive and comparative advantage. In effect this would reduce dependence on the Consolidated Fund by the Ministry of Tourism and in turn, the Jamaican taxpayer.

The JHTA said that of the over US$40 million collected by the TEF annually, 50 per cent is used to market the destination while the other 50 per cent is used to maintain and develop tourism product to improve Jamaica’s attractiveness.

“In terms of marketing, TEF provides about 70 per cent of the Jamaica Tourist Board’s (JTB) annual budget and major support for both Jamaica Vacations (JAMVAC) that solicits critical air seats to the island, and Jamaica Sport,” the JHTA release stated. 

The group argued that diversion of 50 per cent of the funds would be extremely detrimental as it would mean that the JTB would lose three quarters of its budget and critical promotions to bring visitors to our shores would have to be discontinued and/or equally critical maintenance of the product would have to be drastically curtained.  

“In an era of hyper-competitiveness with the opening up of Cuba and increased competition from destinations across the Caribbean and worldwide, neither of these two options is workable,” the JHTA insisted.