DYER and KERR-JARRETT
Monique Hepburn, Staff Reporter
WESTERN BUREAU:
THE HOSPITALITY sector will be hit hard by the tax increases announced by Minister of Finance and Planning, Dr. Omar Davies, in his budget presentation on Thursday, says president of the Jamaica Hotel and Tourist Association (JHTA), Godfrey Dyer.
This is because of the pre-booking arrangement practised by sector players, he said.
"We will have to absorb costs for the next 12 months," said Mr. Dyer. "We cannot extend these costs to anyone so current increases in GCT will have to be absorbed by the hotels."
He told The Gleaner yesterday that his organisation was in the process of preparing a presentation to lobby for a freeze on the increases. "Overall it is going to be very (tough) on us."
While he could not immediately state the figure to be absorbed by industry players, he hinted that the amount could run into
millions of dollars.
Effective May 1, tourism players are required to apply an 8.25 per cent General Consumption Tax (GCT) on services provided. The previous figure was 6.2 per cent.
And Mark Kerr-Jarrett, newly elected president of the Montego Bay Chamber of Commerce and Industry, said he commended the Government's move to balance the budget and its efforts to raise the income tax threshold to $169,104 from July 1 and to $193,440 as of January 1, 2006.
BUILDING MATERIALS
Mr. Kerr-Jarrett said, however, that the added four per cent GCT imposed on building materials would hinder the construction of new homes and businesses and hike the replacement cost of older ones.
"The increase in GCT, especially on building materials, could be reviewed as people are still rebuilding after Hurricane Ivan," he said. "We might even see a tremendous increase in insurance costs."
The chamber president also encouraged the Finance Minister to increase tax compliance as the current rate of compliance falls below 50 per cent.
"As a matter of principle, I have a problem with Dr. Davies increasing taxes without implementing measures aimed at increasing compliance," he said.
"He should first go out and collect from those who are not paying because the system lacks equity as those who are compliant are being penalised for the others."
