(MENAFN- Caribbean News Now) By Adrian Loveridge
The January-December stayover expenditure 2018 Report makes very interesting reading, but it does raise a number of unexplained questions.
It is now well over six months since government introduced a levy of new tourism taxes on 1st October 2018, including the Airline Travel and Tourism Development Fee (ATTDF) or second departure tax, room rate levy, DTS product levy and shared accommodation levy.
In the interest of absolute transparency and securing the undoubting unilateral support of the tourism sector, it was hoped that the administration would have published the figures, to illustrate without question, what additional revenue, the latest taxes have generated.
Without these statistics, it is almost impossible to intelligently compare like-for-like over the last two years.
What needs clarity?
Is the airline travel and tourism development fee element included in the average visitor spend figure? Especially as it forms a legitimate integral part of the overall holiday cost even though it is 'hidden' in the airline ticket cost.
According to published data, Barbados welcomed around 680,000 visitors by air in 2018. Average that out through the three months from 1st October until 31st December and that could be 170,000 passengers (bearing in mind December is one our busiest months).
Assuming 80 percent are paying the higher level of ATTDF at US$70 per person and 20 percent are paying US$35 per person at the intra-Caribbean level, that's a staggering BDS$21 million alone before you even consider the other imposed taxes.
What is difficult to understand?
Why the government has chosen to ignore the cruise passenger sector yet again, despite the stated economic crisis situation? Why while Value Added Tax (VAT) at 17.5 percent is levied on all outbound airfares it is not on cruise ship passengers who depart from Bridgetown port?
Particular mention has been made of a quoted $50 million (unspecified whether BDS$ or US$ currency) that could be collected on online purchases, like hotels, villas and car rentals annually, where VAT is due for goods and services that are provided on Barbados. The $50 million figure is especially puzzling, as 25 percent of this figure could be payable by a single two property hotel operator alone, annually in VAT contributions on the accommodation/food and beverage element that are due. If they are exempted through previously arranged tax concessions, where is the equity and fairness in that?
Of course, if VAT is payable, it should be accounted for and paid, but perhaps part of the reluctance to comply has been created by the inability or unwillingness by the government to repay long due VAT refunds to those entities, who have previously fully complied.
Generally, 2018 shows an encouraging increase in average spend on many areas over 2017, there are some disturbing contradictions. For example, visitors spend is down on souvenirs (-5.3 percent), transportation (-3.3 percent) and perhaps most concerning, entertainment/recreation (-1.2 percent). While in the last case, the percentage decline is small, when you factor the new DTS 2.5 percent product levy payable for three or the 12 month period, then the gap is substantially increased. Perhaps this sub-sector needs some additional attention?
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