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'We cannot afford any more tax'

Published:Sunday | March 18, 2012 | 12:00 AM

Association of Jamaica Attractions opposes increase taxes for tourism services

Janet Silvera, Senior Gleaner Writer

WESTERN BUREAU:The Association of Jamaica Attractions (AJAL), has rejected calls from the Private Sector Working Group (PSWG) to impose more tax on the tourism industry by means of an increase to the GCT rate for tourism services.

The group, made up of 130 licensed attractions operating in Jamaica, also wants the discretionary waiver currently offered to them enshrined into law.

The spin-off from AJAL accordingly provides tremendous employment and revenue-generating opportunities, not only within the attractions sector, but also in the areas of ground transportation, craft, water sports, tour guiding and food and beverage, to name a few.

In a stinging press release on Wednesday, AJAL president Gregory Burrowes said a contributing factor to the growth of the sector has been the granting of discretionary waivers to facilitate the necessary import inputs for their many operations, thereby allowing them to offer a vibrant dimension to the island's tourism product.

"It is therefore with great concern that we view the erroneous statement being made by some that the granting of discretionary waivers only favoured hotels as our attractions sector was also able to access this important incentive. With the help of the incentives our sector saw increased numbers of persons being employed directly and indirectly as new attractions opened."

jamaica gained

In addition, he said Jamaica gained both in terms of taxes paid by his members, as well as their employees. "At this time of serious economic challenges, we think it is even more important that we should be considering a tourism economic growth policy which seeks to enshrine such initiatives into law rather than making arbitrary statements that do not demonstrate the full story to the Jamaican people," he criticised.

His calls come weeks after the Jamaica Hotel and Tourist Association (JHTA) mounted objections and criticisms to the PSWG proposal, which would reportedly see the GCT rate for the sector moved from 10 per cent to "an unbelievable 25 per cent", said Burrowes.

The JHTA president Evelyn Smith has tagged the proposal the 'One ...Two Punch', claiming that if implemented will result in the rapid demise of the industry.

According to Burrowes, the recommendation is ill-advised, as over 90 per cent of the attraction operations are MSMEs which operate at break-even or with extremely thin profit margins and therefore cannot sustain such an increase.

"This increase will simply place an additional strain on their operating costs as it cannot be easily passed on as pricing to most of our clients, especially the cruise lines which is established up to two years in advance."

He said when changes in taxation policies occur, many of their clients typically will opt to eliminate a particular tour if the entity selling the tour is unable to absorb that cost and passes it on to them. This he said will force those operating at a break-even point to either fold or to cut other costs such as staffing or product quality, "Either of which will impact negatively on our country through increased levels of unemployment and lower revenue inflows".