While the budget presentation was the main business at the house today - we couldn't cover all of it in our lead story.
One feature that has to be dealt with all on its own is the change in the hotel tax regime. Maybe change isn't the right word, though because the bottom line is that there won't be any more 9% hotel tax. Hotel guests will now pay the standard GST of 12.5% just like everyone else.
Now this would seem to drive up the cost of accommodations, but on the flip side, it will liberate the hotel sector from the oppressive zero-rated tax regime they are currently under - where they can't claim back GST on their inputs.
So, when they claim back their GST which will cut costs to hotel owners, it should even out - but, truth is, these things rarely do.
The loss though is to the BTB - which is funded completely by the collection of hotel tax.
The PM outlined the plan today:..
Hon. Dean Barrow, Prime Minister
"One key recommendation that the government has accepted in principle is to bring the hotel and accommodation wholly into the GST net while at the same time repealing the 9% hotel and tourist accommodation taxes."
"This will have the effect of making the hotel accommodation services fully taxable at the standard GST rate while as I said removing the current hotel tax that is being charged. We would then put in place a mechanism to transfer a portion of the revenue collected from the GST to the BTB."
Legislation will have to be introduced to provide for this reform, which should become effective on 1st January 2013.
So what does the tourism sector think? Well, they are still forming their position but we spoke to President of the BTIA Jim Scott today who told us that there are quote, "a lot of unanswered variables."
He did add though that it will create a much more attractive investment climate, that it is "nothing short of a stimulus" and said that there are private sector people who support it.
He did say that room rates are could increase but hoteliers have to try to try to increase the value for their customers.
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