KINGSTON, Jamaica: The government of Jamaica has announced an agreement with the Jamaica Hotel and Tourist Association (JHTA) on tax measures to be imposed on the tourism sector in the 2012-2013 Budget.
The agreement will introduce 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 per night of US$1 for properties with less than 51 rooms, US$2 for hotels with 51 to 100 rooms, and US$4 for hotels with 101 rooms or more.
This news follows on the heels of a recent announcement coming out of Antigua & Barbuda that the government had presented and passed the Airport Administration Charge Act 2012, which now takes Antigua’s overall airport taxes to US$93.75 up from US$63.75, and will be built into the cost of travellers’ tickets.
This move was strongly condemned in March by the International Air Transport Association (IATA), which reportedly wrote a letter to Civil Aviation and Culture Minister, John Maginley, stating that the new taxes would stand at a level that far exceeded the regional average and stood well beyond a viable level for airlines.
Cyriel Kronenburg, IATA’s assistant director of government and infrastructure affairs, reportedly said in the letter that “plans for yet another major increase in costs to passengers will seriously damage the ability of airlines serving Antigua & Barbuda to operate in a profitable manner, and will surpass any revenue growth for the airport and will damage the health of Antigua & Barbuda’s economy and tourism sector”.
However, the government has remained undeterred and following the passage of the act, it has mounted a strong defence of the move. Prime Minister Baldwin Spencer described the new tax measure as reasonable and fair while brushing aside suggestions that the move would bring irreversible harm to the country’s tourism industry.
“Even if it does, initially, that is not going to be sustained over time. There might be an initial reaction but Antigua & Barbuda is a destination that sells itself,” Spencer reportedly said.
The prime minister said the airport needed to be in a position where it could effectively pay for itself in the long term and the improvements to the airport terminal came at a price.
“People would know that if they want a modern airport with all the amenities, then the money has to come from somewhere. We have taken the view to be reasonable and fair with this,” Spencer said.
Similarly, Jamaica’s Minister of Tourism and Entertainment, Dr. Wykeham McNeill, has defended his government’s new tax measure.
“I am convinced that these measures provide a win-win situation as they will ensure that we meet our revenue target while protecting our industry, especially our small properties, the minister said. “I want to commend the JHTA and other stakeholders who put forward alternative proposals from which we could eventually secure a workable compromise. I also wish to acknowledge the hard work of the technical teams from the Ministry of Tourism and Entertainment and the Ministry of Finance and Planning, who worked tirelessly to ensure the success of this collaborative effort.”
Evelyn Smith, President of the JHTA, was quoted as saying that the levels for the new tax measures were arrived at “in a spirit of cooperation” and with the aim to arrive at an outcome that was beneficial to all parties involved.