Don’t tax Airbnb yet, says Sealy

The Ministry of Finance is being advised to ensure there is clarity on what comprises the informal accommodation sector before imposing taxes on those involved in the programme.

The unregistered lodging sector has been generating an increasing amount of interest among the formal sector, as a rising number of visitors choose homestay programmes such as Airbnb over hotels.

This has prompted calls for regulation and taxation of the short-term accommodation providers.

However, Minister of Tourism Richard Sealy warned at a recent news conference at the Lloyd Erskine Sandiford Centre that the authorities must tread carefully.

“I know the Ministry of Finance is keen to get tax revenue. But again before you can tax something you have to find out what it is. It is not simply the case of just saying, ‘all these people are using the Internet to provide accommodation and it is happening outside of the tax net’. Some of these people are normal hotels that are just using it to get business. So we have to do some analysis and go from there,” Sealy insisted.

Chief Executive Officer of the Barbados Hotel and Tourism Association Rudy Grant confirmed earlier this month that new guidelines were being drafted, to include regulation of the short-term rental programmes.

Yet, Grant told Barbados TODAY the issues went far beyond Airbnb, and it was critical that the entire accommodation sector be regulated to ensure they all meet minimum international standards.

At the same time, General Manager of Sugar Bay Barbados Beach Resort Morgan Seale insisted homestay programmes must be held to the same standards as the rest of the accommodation sector and regulation was the best way to achieve this.

However, Sealy said while he was aware that the Barbados Tourism Product Authority, Barbados Tourism Marketing Inc and the Barbados Tourism Investment Inc were “examining the advent of Airbnb” with regulation in mind, it was “a little complicated” issue that required careful analysis before any remedies were prescribed.

“It is not a simple issue. I know some people have gone public making statements that I don’t necessarily know I can agree or disagree with in the absence of some proper research being done on it. It is a reality in Barbados, yes, but it is also something that has in many ways dovetailed with a huge part of our accommodation plant.

“We have always had these guesthouses all over the place that have being doing business for years. Many of them are unregistered [and] many of them are attached to people’s homes and so on. I guess we need to do some proper analysis on the whole thing,” the minister stressed.

There are some 1,100 Barbadian homeowners who have listed their properties on Airbnb’s website.

The online accommodation marketplace is said to have attracted about 16,000 visitors, or just over two per cent of the total 631,520 tourists to the island last year.

16 Responses to Don’t tax Airbnb yet, says Sealy

  1. Rob March 3, 2017 at 6:55 am

    I fully agree with Richard Sealy about not taxing Airbnb and there is a very good reason. Most people who put the rooms in there home up for rent via Airbnb do so just to makes end meet.

    Nobody in there right mind would want a stranger in there home unless there financial position forced them to do so. Just think about that for a minute. Airbnb is a good way to bring people into Barbados and they bring with them foreign currency which is badly needed.

    Airbnb needs to run in Barbados for at least five years before looking at tax and regulation so it has time to take hold and become popular. Any type of interference will stifle what could become a good way to bring new tourists into the country. If anything look at ways of promoting the Airbnb in Barbados.

    Reply
  2. Robert March 3, 2017 at 10:49 am

    Yes, this is a complicated issue. Although the established hotels feel that the AirBnb hosts should be regulated. I would be of the opinion that the money earned is more likely to stay in Barbados then the profits of the large hotels. In any case it is a different market. The government should tread softly!

    Reply
  3. Neil March 4, 2017 at 6:24 am

    What about the private cars been rented to tourists, we, the legal hire car operators , pay high licensing fees, inspection every year , high insurance rates because it’s a H number, the licensing authority is doing nothing about it

    Reply
    • Eric Mason March 6, 2017 at 5:55 pm

      how much duty does the hired car companies and taxis pay when they buy a vehicle?

      Reply
  4. J. Payne March 6, 2017 at 12:28 am

    Just forget taxing AirBNB just like how you ceased taxing Sandals…

    Reply
  5. kammie March 6, 2017 at 6:44 am

    Hope the greedy hoteliers suggest the same concessions to the homestay participants. I am all for standards for AirBNB and they paying the fair share

    Reply
  6. Phillip March 6, 2017 at 9:21 am

    The Minister of Tourism is a very thoughtful man. The sharing economy is based on trust. The extent to which minimum standards can improve trust should be explored. Give the Airbnb and similar phenomenon in Barbados some time to mature into a fairly dominant design before getting too prescriptive. Innovations like Airbnb present an opportunity to promote and develop community tourism. Do some research, study other Caribbean markets. Cuba will make a good case study. In the digital economy evidence-based policymaking is not an option.

    Reply
  7. Zwee March 6, 2017 at 10:19 am

    We have air bnb guests come to us…. They hire cars ( we always recommend Reputable companies) . They go out for meals, they go on tours, they use taxi companies and lots of local vendors. They are a valuable tourist asset…let’s not make it more pricey for for them… it is opening Barbados to all kinds of tourist.. not just the high end … let us welcome them and if tax is to be imposed, don’t make it too steep. In another note, I dont Think Air bnb is a threat to the hotel Sector… they are a different kind of visitor. There is room for all, and this is a great way for people ( hosts)to Utilise their spare room
    And make some exta money to make ends meet .

    Reply
    • Kammie Holder March 6, 2017 at 8:55 pm

      Well said. Most hotel literally juck out yah eye with their pricing rather than seeking sustainable business operations. A banks beer costing US$4.50 despite they pay only 8% VAT while importing 70% of their vegetables

      Reply
  8. Frank March 7, 2017 at 12:25 pm

    I do not think that paying tax would be a problem. However, having to stand in endless lines submitting reams of paperwork just to seek annual compliance, leaving one’s day-job to wait for a public inspector to show up and generally dealing with all kinds of inevitable Government inefficiencies. That’s where the de-motivation would set in for most Air bnb hosts.

    Reply
  9. Helicopter(8P) March 7, 2017 at 12:32 pm

    The Airbnb population has to monitor and secure their homes so I would think with these task performed they should have generous tax breaks

    Reply
  10. Neil March 7, 2017 at 7:59 pm

    We pay the same duty on a hire car as you will pay for private purchase as well on parts, we are granted on Z, ZM,BT DUTY FREE AFTER FIVE YEARS , when are the authorities at the licensing going to stop illegal hire cars and vans transporting tourist

    Reply
  11. Bab March 8, 2017 at 12:21 am

    Many Airbnb visitors and visitors with similar companies are first time visitors to Barbados. They represent business which is unlikely to stay in a hotel, and is NEW business for the island. The foreign currency with which they pay for their accommodation, rental cars, taxis, golf, food, liquor, entertainment, housekeeping service etc. is paid to Bajans and benefits our country. Many of these visitors appreciate being able to pay one entity, like Airbnb, or HomeAway, in their currency, in advance, with their credit card and not have to run around purchasing US drafts, or doing bank transfers etc.

    Reply
  12. Neil March 8, 2017 at 5:28 am

    But due to the duty free on these vehicles, we have to still pay VAT on maintaining these vehicles and anything associated with them ( entrance fees to different attractions and lunches) are all vatable. YET as the vehicle is “duty free” we cannot claim the VAT back. So, basically we LOSE 17.5% on every tour daily and on the commission that we pay hotel reps.
    The road tax is much higher on the rental vehicles and the buses, in comparison to private plates.
    So, before we look at taxing guest houses, which generates income for tourism companies, maybe the government needs to address all the illegal rental cars and taxis out there.

    Reply
  13. rodart March 25, 2017 at 7:49 pm

    Stop taxing the hell out of people in this country. Too many tourists ate saying we are too expensive already, food for example.

    Reply
  14. Garry Burke May 19, 2017 at 3:25 pm

    You don’t tax Airbnb….you tax people who have an income, regardless of where that income is derived. The tax thing is a furphy. If an “Airbnb operator” is not paying his proper tax then he is breaking laws that currently exist. Enforce the tax laws, don’t dream up new ones. The only legitimate argument is that licensed operators are forced to meet a standard to protect the Barbados “brand” and we should ensure that brand is not trashed by unlicensed operators. Airbnb is simply a booking “app” and almost every hotel in Barbados is on it. There are existing laws relating the guesthouses…perhaps people should read them!

    Reply

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