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#441618 - 06/29/12 07:49 AM Restructured for comfort, Hoteliers and GST
Marty Offline

While cuts are anticipated in government expenditure, in the tourism industry the GST is expected to be introduced to replace the hotel tax. But stakeholders are not complaining. Since its introduction several years ago, hoteliers were exempted from charging GST on goods and services; instead, guests had to pay a nine percent hotel accommodation fee despite the services being considered a standard rated product. Government is now proposing to include the hotel accommodations sector as part of the overall tax system. According to the Chief Executive Officer in the Ministry of Tourism, Tracy Panton, the introduction of GST will considerably reduce the inconveniences currently faced by hotel owners.

Tracy Panton, C.E.O., Ministry of Tourism

“The proposal is for the hotel accommodation tax as it now stands at nine percent to be repealed and that the hotel accommodations sector falls under the GST regime as a standard rated product. Currently the hotel sector is exempt, and therefore they are unable to claim their inputs into delivering hotel accommodation services. I think that the impacts will be positive. I think that the strategy is certainly pro-investment, particularly for new properties or properties that are trying to improve their products. It also, not only is it pro-investment but it also helps to support the efficiency and effectiveness of our national tax system and structure. And so from that point of view I think it’s a very positive move by the government. Clearly the concerns of our sector relates to the designated tourism marketing fund that is now being spearheaded by the B.T.B., as well as the other quality assurance nation planning initiatives, capacity building programs that are also part of the capacity building of our Belize Tourism Board. We have gotten assurances from the Ministry of Finance that the funding for the B.T.B. will remain intact, that the government, whatever the formula is that the B.T.B. will have a designated fund for which to execute its operations. And so with that assurance I think that this system can be good for tourism, it mitigates the cascading effect that some industry partners now complain about.”

Isani Cayetano

“In terms of presenting these proposed changes to the tax regime to stakeholders, what was their reception in terms of learning about these new proposals?”

Tracy Panton

“You know the issue of falling under the GST net, if you will, has been an issue that the industry has been lobbying for quite some time. In fact, from when the GST was initiated several years ago the tourism sector wanted to fall under the GST net because of the ability to claim for your inputs. So I don’t think that it is seen at all, at least that’s not the reaction I’ve received, as a negative idea but certainly the concern is to ensure that the functionality of the Belize Tourism Board that drives so much in terms of developing programs for the country can remain intact.”

Panton also says that a deadline for the implementation of the new tax regime has not been set.

Channel 5

#441673 - 06/30/12 08:05 AM Re: Restructured for comfort, Hoteliers and GST [Re: Marty]
Marty Offline

A Game Change On Tourism Tax

While the budget presentation was the main business at the house today - we couldn't cover all of it in our lead story. One feature that has to be dealt with all on its own is the change in the hotel tax regime. Maybe change isn't the right word, though because the bottom line is that there won't be any more 9% hotel tax. Hotel guests will now pay the standard GST of 12.5% just like everyone else.

Now this would seem to drive up the cost of accommodations, but on the flip side, it will liberate the hotel sector from the oppressive zero-rated tax regime they are currently under - where they can't claim back GST on their inputs.

So, when they claim back their GST which will cut costs to hotel owners, it should even out - but, truth is, these things rarely do. The loss though is to the BTB - which is funded completely by the collection of hotel tax.

The PM outlined the plan today:..

Hon. Dean Barrow, Prime Minister
"One key recommendation that the government has accepted in principle is to bring the hotel and accommodation wholly into the GST net while at the same time repealing the 9% hotel and tourist accommodation taxes."

"This will have the effect of making the hotel accommodation services fully taxable at the standard GST rate while as I said removing the current hotel tax that is being charged. We would then put in place a mechanism to transfer a portion of the revenue collected from the GST to the BTB."

Legislation will have to be introduced to provide for this reform, which should become effective on 1st January 2013. So what does the tourism sector think? Well, they are still forming their position but we spoke to President of the BTIA Jim Scott today who told us that there are quote, "a lot of unanswered variables."

He did add though that it will create a much more attractive investment climate, that it is "nothing short of a stimulus" and said that there are private sector people who support it.

He did say that room rates are could increase but hoteliers have to try to try to increase the value for their customers.

Channel 7


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