Tour operators must pay ABST by October 1

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By Carl Joseph

Local companies that provide tour services to visitors will be required to start paying Antigua and Barbuda Sales Tax (ABST) from October 1, 2020.

Minister of Tourism, Charles Fernandez, told Observer that tour operators have already been notified that they needed to fall in line, but they had requested more time before they starting to comply with the tax law.

“The reason why it’s put back to October 1 is to sensitise the operators. But the other thing is that some of them have already booked tours at a price that excluded the tax, they claim, so we said okay, we’ll give you time,” Fernandez explained.

Since ABST was first introduced in 2006, tour operators had petitioned the then United Progressive Party (UPP) administration for an 18-month grace period before they began complying with the act. According to Fernandez, the tour operators have not made any contribution towards the sales tax since that time.

“The same tour operators would tell you that we have to fix the roads going up to Betty’s Hope, we need to fix the forts, and we need to do this and that … so that we can have more product offering for them to benefit from making tours,” the minister said.

Fernandez also pointed to much-needed infrastructural upgrades around St John’s and the island on a whole. He mentioned the long overdue rehabilitation for the sewage system and APUA’s electrical and water networks which need immediate attention.

“If we don’t do it, then the same people will say that we are not bringing our people there because your town is dirty and your sewage is not 100 percent. So, we have to make a determination that this is where we have a vision for St John’s and the island and that is what we are pursuing,” Fernandez explained.

The minister also addressed the push-back he received from the tour operators when discussing the future expectation of full compliance with the ABST. 

He likened it to the imposition of the 1.5 percent increase on hotel room tax last year. 

“A number of the hoteliers were saying if you do that, less people will come. However, last year was our biggest year for hotel stay-overs.

“We have [put ourselves] in a position to say that our product is so good that we can afford to increase the tax a bit because people would want to come here,” he added.

The minister was sure to explain that the tax as prescribed was only to be applied to the tour operators’ final charge to the guests they service and not on every component activity that comprises the overall tour.

“If you’re doing a tour which includes facilities, includes the taxi operator, and includes something else, and the total is $100 then you charge $115,” Fernandez said while giving an example of how the tax would be applied.

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