BHA argue GST Status

The Island Newspaper, Ambergris Caye, Belize            Vol. 16, No. 6            February 8, 2006

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Members of the Belize Hotel Association at the meeting discussing the effects of General Sales Tax on the tourism industry.

A special meeting of the Belize Hotel Association (BHA) was held in San Pedro last week, February 1st, in an effort to explain the current status of the General Sales Tax and its impact on the Hotel Industry if the Legislation is implemented in its current form.

   Members of the BHA Board told the interested hotel and resort owners, managers and employees that they must lobby government to place the accommodations sector in the zero-rated category. Presently the legislation places all accommodations providers and those who sell accommodations as part of their packages in the ‘Exempt’ category, which means that whatever inputs they pay into GST, cannot be claimed back or refunded, thus increasing the cost of providing the services. Under this classification, hotels would not charge GST, but would still be subject to the accommodation tax collected by the Belize Tourist Board (BTB) which is currently at nine percent.

   According BHA representatives including Einer Gomez from Ramon’s Beach Resort, this means that the accommodation sector would either have to absorb the 10% tax it pays for all supplies purchased to produce a hotel room, or raise hotel rates in order to maintain the same level of profitability.

   For example, the GST paid on any remodeling, upgrading or other capital expansions by hotels, would have to be absorbed by the hotelier as no input tax credit would be allowed. The exempt status does not apply to any other sources of income to a hotel such as food and beverage and tour operations.

   “We have seen a steady increase in the cost of doing business – including increased utility costs,” Maria Roberson, BHA President told the group.

   When the GST was first written, hotels were given a zero tax status. This would allow this industry to deduct GST taxes they pay. On December 28th during second reading of the GST, this classification was changed to “exempt,” which does not allow these businesses to deduct GST taxes.

   The members of the BHA say they would prefer to see the repeal of the accommodation tax, and place their industry at the standard 10 percent GST status along with other business sectors.

   The BHA is asking for those in support of their proposal to fax a letter to the BHA Headquarter where they in turn will use it in their lobbying efforts. The BHA Fax number is: 223-0669 or, in San Pedro letters can be given to Mr. Einer Gomez at Ramon’s Village.

   The GST is tentatively scheduled to be implemented July 1st, 2006.
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