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Government answers hoteliers’ call for tax relief

Hoteliers’ pleas for a level playing field have been answered somewhat with the granting of $12 million concessions by Government, similar to those extended to the Sandals Hotel chain.

Minister of Tourism and International Transpor Richard Sealy made this announcement today in the House of Assembly while moving the second reading of the Barbados Tourism Product Authority Bill, 2014 and the Barbados Tourism Marketing Inc., Bill 2014.

The minister recalled that as far back as 2000, technocrats in the Ministry of Tourism had advised Government that tourism should be treated as an export sector.

“We are going to do that, but we are not going to do it in a manner that will impair our local industry,”  said Sealy, who went on to reveal that a memorandum of understanding (MOU) would soon be signed to that effect.

He said Government was prepared to grant duty free concessions to the hotel sector for food and beverage and other things, provided that they could not be sourced locally.

The minister further cautioned that it had been “enshrined” into the MOU that “any hotelier or any tourism entity that tries to abuse the MOU will be struck off the list and not allowed to enjoy the concessions”.

He also warned hoteliers that the MOU would be policed by the soon to be established Barbados Tourism Product Authority.

“This is a seismic shift for the entire sector,” said Sealy, who said that “at times hoteliers came come across as insatiable”. However, “they cannot enjoy this level of treatment and then complain”, he said, pointing out that it was no easy task bringing the farmers and manufacturers to the table and arriving at an agreement.

“When I meet with hoteliers they often say, ‘Oh, if we can get this and that investments will expand’.

“I sincerely hope that they will do what they promised to do and we will have this new incentive regime for the sector,” he said.

The minister said it has been calculated that the concessions granted to the sector would lead to a loss of $12 million to the Treasury.

He however noted that with the new concessions in place the hotel sector would look after its marketing of the product.

On the controversial issue of concessions to Sandals, which has been granted a 40-year tax holiday, including tax relief on all capital goods, food and beverages, in addition to relief from Value Added Tax and other duties payable on imported vehicles, personal and household effects for staff, Sealy said: “I heard a lot of things about the Sandals concessions, but I still maintain that it is the most transparent arrangement. Nothing was done under any bushel.

“We did what we had to do in the full glare of the whole world. I am not at all embarrassed by my role,” the minister stressed, explaining that he had been trying since 2008 to get Sandals to come here.

In further defending his Government’s decision to offer the generous tax breaks to Sandals, the St Michael South-Central MP told Parliament that “the day Sandals opened in Barbados, Air Canada announced that it will be putting a larger aircraft on the route to Barbados”.

“I do not believe that people understand what is involved in this whole exercise. Sixty million [dollars] will be spent on the Casuarina Hotel between April and December to bring it up to standard,” Sealy added.

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