At tourism investment conference in Puerto Rico: Forestay urges Caribbean to rethink tax policiesPOSTED: 04/26/12 12:55 PM
SAN JUAN – Caribbean Hotel & Tourism Association President (CHTA) Josef Forstmayr opened the 16th Annual Caribbean Hotel & Tourism Investment Conference (CHTIC) in Puerto Rico with a call for Caribbean governments to rethink tax policies with an aim to remove or reduce consumption taxes on hotels and tourists. He also called for tax incentives to attract more investment and for effective public/private sector partnerships to stimulate investment and product development.
Fortsmayr said that he is “extremely concerned about governments’ appetite for taxation of the tourism industry. This continues to increase unabated.”
He described tourism as an export industry, adding that many Caribbean countries do not treat it as such. “We hear of new policies that tax not only the private sector, but also our visitors directly. These masquerade under such names as airport improvement taxes, tourism enhancement fees and by far the worst of all, the UK’s airline passenger duty. Increased taxation is regressive. It will result in less revenue for the hotel and attraction sector. It will also negatively affect our countries’ wider economies due to the significant domestic agricultural and manufacturing linkages that tourism provides.”
Fortsmayr said that Caribbean governments must make a serious effort to review their taxation policies on the tourism industry. “It is time now to remove or reduce all excessive consumption taxes on our visitors. It is also time to re-think all policies which call for an increase of these consumption taxes. Our industry is based on competitive pricing. Our visitors will simply choose other destinations that provide better value.”
There is also a need for tax incentives to attract the investment the Caribbean needs to maintain its appeal and competitiveness as a world-class tourist region, the CHTA-president said. “We need effective public/private sector partnerships that will stimulate the investment and product development which are critical to the growth of tourism. The Caribbean tourism industry needs strong advocacy, and I am pleased to say that CHTA’s Tourism is Key advocacy campaign, launched two years ago continues its momentum. It is one of the most important initiatives that we have undertaken in our 50-year history. The program has now been launched in 11 Caribbean countries, with more planned for this year.”
The four pillars of the Tourism is Key campaign are advocacy with governments and citizens, linkages of tourism into local industry, agriculture and services, regional integration (improved airlift, less bureaucracy for regional travel) and regional marketing
“We must create a strong consensus with both our leaders and the public so that travel and tourism receives the full support it needs as the Caribbean’s most vital export. It is the fastest way to create jobs, grow the economy and generate income for all,” Forestay said.
He referred to a recent study published by the Jamaica Hotel and Tourist Association that shows that the Jamaican economy enjoys strong linkages with tourism, driving 15% of all construction, 20% of all manufacturing and 21% of all agriculture/fishing. The study also showed that 71% of hotel and restaurant revenue remained on-island that the tourism industry contributed 20.4 percent of the total government revenue, and that tourism represents 50% of Jamaican exports.