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Tapping tourism funds for tax relief could hurt marketing - JHTA

Published:Tuesday | April 12, 2016 | 12:00 AM

The Jamaica Hotel and Tourist Association (JHTA) has argued that a proposal to use the Tourism Enhancement Fund (TEF) to help finance the Government's tax-relief plan was unworkable.

In a release yesterday, the JHTA said the funding of the tax break did not fall within the mandate of the TEF.

"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 association said.

The JHTA warned that the diversion of 50 per cent of the funds would be extremely detrimental, as it would mean that the Jamaica Tourist Board would lose three-quarters of its budget and critical promotions to bring visitors to "our shores would have to be discontinued ...".

The JHTA stressed that 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 taxpayers themselves.




Hotelier Gordon 'Butch' Stewart had suggested that the Holness administration consider using money from the TEF to help finance its initiative to exempt from income tax liabilities persons earning $1.5 million or less.

Finance and the Public Service Minister Audley Shaw had indicated that he would take Stewart's proposal to Cabinet for discussion.

Yesterday, former Tourism Minister Dr Wykeham McNeill urged Shaw to seek wide consensus among the players in the tourism sector, given the commitment by the Government concerning the use of the TEF.

"It is abundantly clear that the Jamaica Labour Party (JLP), in the heat of their election campaign, made untenable promises to the people. Now that the rubber has hit the road, it is clear what they put forward as a 'plan' was not viable," he charged.

McNeill said the TEF was established by law to provide resources for marketing the destination and to invest in improvements in Jamaica's tourism product.

"To divert these funds is to jeopardise the continuation of product improvements that are vital to the long-term sustainability of the sector."