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EDITORIAL: Merger of TEF, TPDCo bad idea

Published:Sunday | May 22, 2011 | 12:00 AM

Like the Jamaica Hotel and Tourist Association (JHTA), this newspaper is uncomfortable with, and wary of, the proposal floated last week by the tourism minister, Mr Edmund Bartlett, for a merger of the Tourism Enhancement Fund (TEF) and the Tourism Product Development Company (TPDCo).

A potential of any such intermingling, beyond what currently exists, is a diminution of transparency - or worse.

The TEF, it is to be recalled, was established by the Government in 2004 to help fund projects that would, as the name suggests, enhance Jamaica's tourism product. The TEF is financed by a US$10 tax (to be moved to US$20) charged to incoming airline passengers, and US$2 for those who visit by cruise ship. The cruise lines hardly turn over the money and owe the Jamaican Government an estimated US$12 million.

Prior to the establishment of the TEF, the Government had set up TPDCo, which is responsible, primarily, for advancing and executing infrastructure projects that help tourism. With the advent of TEF, TPDCo was assured of funding of its programmes.

In recent years, however, we have noted with concern, as have many in the tourism business, the TEF seemingly skirting at the edge with the kinds of projects it has been willing to finance and the amount of money it has been ready to put into some. Bluntly, some of them have seemed to us to be downright private commercial ventures, although the TEF will probably insist on their relevance and its capacity to make credible cases for its decisions.

Get clear picture

Our concerns notwithstanding, it is now possible to review the TEF's accounts - even if it may require insisting that they be made available - to arrive at a clear picture of where and how its money is being spent.

It is not that this will be impossible with a merged entity, but it would considerably more difficult to do. Or, more correctly, joining the TEF and TPDCo will provide more crevices and crevasses into which things can fall and become hidden.

This potential that the merger would provide for the opaque deployment of resources and less robust interrogation of decisions is particularly important with the likelihood of greater inflows into the fund with the increase of the tax on air passengers.

There will be better transparency if they remain discrete entities.

Perchance it is that there is a philosophical concern on the part of the administration for the existence of the raft of special funds and the financial and treasury inefficiency they cause, then it would make greater sense to abandon the TEF as a specific agency and steer the head tax into the Consolidated Fund.

The bottom line: Mr Bartlett should abandon the idea.

Unfairness in visitor taxes

Bar a late change of heart by the administration, the tax that air passengers to Jamaica pay will double to US$20.

The country's hoteliers are concerned about this - and they have good reason to be. For the Government's approach to taxing tourists to the island is patently unfair and its enforcement uneven.

For instance, the tax on cruise-ship passengers is US$2 per passenger, but the cruise lines mostly honour this obligation in the breach. They owe Jamaica more than US$12 million.

And unlike hotels, cruise lines pay little or no taxes in Jamaica and purchase little in the country.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: r fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.