Govt to consider tourism leaders' tax plan

Wed, Mar 5th 2014, 10:45 AM

Despite Minister of Financial Services Ryan Pinder's dismissal of a recommendation from tourism leaders that the government should roll out a shared payroll tax as an alternative to value-added tax (VAT), Tourism Minister Obie Wilchcombe yesterday said the government will "assess" their plan.
Veteran hotelier Robert "Sandy" Sands told The Nassau Guardian that tourism leaders would soon present a five-point "smart tax plan" to the government.
The plan will include a recommendation that the government tax web shops as a way to improve revenue and institute a shared payroll tax of five percent, paid by both employer and employee.
Wilchcombe said the tourism industry's plan is but one of many the government intends to mull over ahead of the planned implementation of value-added tax on July 1.
"The government is looking at everything before we proceed," Wilchcombe said.
"The prime minister invited the private sector and all stakeholders in the country to submit their ideas. So what the hotel association and the other associations are proposing will certainly be considered.
"You must remember that we're a service driven economy and at all times we have to consider the impact of anything that we do and how it would impact our service industry.
"I suppose that they would have given tremendous thought and had the research done by someone who is respected in the industry. We will look at it and we will assess it. But again, the government is welcoming all views and at the end of the day it will make a decision that is required."
The tourism industry leaders' recommendations are being proposed as an alternative to a 15 percent VAT rate, which they insist will hurt the country's number one industry.
"Tourism is the goose that lays the golden egg," said Sands, the group's spokesman.
"We protect tourism. We protect every industry in this country.
"Tourism is the lifeblood of the Bahamian economy and tourism leaders in The Bahamas are proposing a smart tax plan that will support, strengthen tourism and raise needed government revenues."
However, Pinder does not buy that argument.
He said that nearly every country with a successful tourism industry has some sort of consumption tax in its economic model, which has not damaged their respective tourism sectors.
Pinder added that the government has seen taxes from the tourism sector diminish because hoteliers are finding ways to garner revenue outside of traditionally taxed areas.
He said the government's planned tax reform, with the introduction of VAT, is a way to address the issue.

Click here to read more at The Nassau Guardian

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