Changes to Tax Package for Tourism Sector

Minister of Finance and Planning, Dr. the Hon. Peter Phillips, on Wednesday (June 6) outlined changes to the tax measures to the tourism sector for the 2012/13 financial year.

The changes came out of discussions convened by Minister of Tourism and Entertainment, Hon. Dr. Wykeham McNeill, following a request by the Jamaica Hotel and Tourist Association for further dialogue on the previously announced tax measures.

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The proposals that were agreed on will ensure that the revenue anticipated in the tax package announced by the Finance Minister will be maintained.

“What we were seeking to do is to meet the constraints of (players in) the industry, who claim that they operate in a very competitive and difficult international environment. At the same time, we have made them understand that the revenues that are needed cannot be reduced because if the crisis of the debt was to deepen, they would be the first to be affected because of the sensitivity of that sector as a whole,” Dr. Phillips said, while closing the 2012/13 Budget Debate on June 6 at Gordon House.

The agreement will see the introduction of a US$20 fee for each arriving passenger, whose trip originates abroad, as of August 1, 2012.

Effective September 1, 2012 an accommodation tax will be introduced for each occupied room of US$1 per night for properties with less than 51 rooms, US$2 for hotels with 51 to 100 rooms, and US$4 for hotels with 101 rooms and above.

These rates are a reduction of the previously announced US$6 for properties with more than 50 but less than 101 rooms; US$10 for hotels with more than 100 but less than 201 rooms; and US$12 for those with 200 rooms and above.

The modified alcohol regime for tourism will remain as previously announced, while the General Consumption Tax (GCT) rate for the sector remains at 10 per cent.

As was announced, effective September 1, 2012, the current tax free expenses of commissions and transportation for the tourism sector will no longer be allowed.

However, the definition and treatment of these items will be subject to further discussions prior to implementation.    

“These measures have been agreed in a spirit of cooperation with the JHTA and the JHTA has agreed to assist the Government with sensitising industry players as well as travel partners on the importance of implementing these measures,” Dr. Phillips said.

He also commended “those elements in the JHTA for displaying the quality of civic responsibility and good co-operate citizenship which is going to be needed to take us through these times."

By Latonya Linton, JIS Reporter