Hotels to pay additional 1 percent tax

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By Latrishka Thomas

The Antigua and Barbuda Sales Tax (Amendment) Bill 2019 was passed yesterday in the Upper House and by dint of that, the Antigua and Barbuda Hotel Accommodation tax has been raised by 1 percent.

Leader of Government Business, Senator Mary-Claire Hurst explained the reason for the adjustment to the Act, saying that “the purpose of the amendment to the Antigua and Barbuda Sales Tax is to expand the meaning of the term holiday or hotel accommodation and to extend this occupation to include short term accommodation.

“The Bill further proposes that persons covered by the expanded definition, should not be exempted from the payment of the input tax credit so what we are doing here, we are expanding on the meaning of the term holiday or hotel accommodation.”

Earlier this month, the Bill was passed in the Lower House of Parliament with unanimous agreement from the Members of Parliament.

There, the Member of Parliament for St John’s Rural North, Charles Fernandez – who’s also the Minister of Tourism — lobbied heavily for the implementation of this new tax, saying that it will benefit the tourism industry.

He explained that the 1 percent increase in the hotel accommodation tax was being introduced to assist the Ministry of Tourism with its marketing and promotional efforts.

Opposition Senator Damani Tabor spoke to that rationale during the sitting of the Senate saying that although it appears to be noble, quality of arrivals into the twin island must prove that the opportunity cost was worth it.

“We are boosting the sales tax by 1 percent, according to MP Fernandez, because he needs more money for marketing and promotion. All we are saying is, it is time to look at the marketing and look at the results you are getting and stop focusing on just advertising to anybody to make up numbers so that when you do your presentation to stakeholders or put out a press release, it sounds good. No! We have to look at reaching and attracting the highest quality traveler possible.”

Meanwhile, the Bill has provided tax exemption for some goods and services of which Government Senator Osbert Frederick in particular expressed contentment.

He said that, “Tax reduction or elimination on some of these items is a wonderful thing. I mean prescription in this country can cost an arm and two legs…”

According to the Bill, the goods and services that will now carry a zero percent tax rate are: “the prescription of eye glasses, contact lenses and prescription sunglasses; a supply of coffins or caskets imported or purchased locally; a supply and replacement of biodegradable cups, plates and containers on importation or by local purchase; and a supply of hurricane shutters on importation or by local purchase.”

In addition, “a sale of real property, to the extent that the property relates to commercial premises, including land designated as commercial or on which substantially commercial activities are carried out are and is attributable to such premises” is not taxed.

The Bill will be gazetted in short order.

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