The Grenada Hotel and Tourism Association (GHTA) is upset with a 5% levy imposed by government on stay-over visitors as part of a move by the New National Party (NNP) administration of Prime Minister, Dr. Keith Mitchell to raise funds for his cash-strapped government.
The announcement in the budget by Prime Minister and Minister of Finance, Dr. Mitchell of the Tourism Marketing Levy of US$5 per night has left a bitter taste in the mouth of local hoteliers.
Permanent Secretary in the Ministry of Finance, Timothy Antoine had first alluded to the new tax at one of the public forums held at the national sporting stadium at Queen’s Park about three weeks ago to discuss the homegrown Structural Adjustment Programme.
The new tax is also contained in a draft letter of intent prepared by the Ministry of Finance for government approval and to be sent to the Washington-based International Monetary Fund (IMF) to seek its support for the programme to be implemented in 2014.
The official announcement of the 5% levy resulted in GHTA seeking an urgent meeting with government on the issue.
A meeting was held Monday afternoon with Permanent Secretary Antoine where the association put forward a five-point proposal to government as an alternative to the new tax.
President of the association, Ian DaBreo, in a telephone interview with The New Today newspaper said that his membership presented Antoine with a letter outlining the GHTA position for him to take back to the Mitchell government for consideration.
He said that the hoteliers explained the negative impact the imposition of the Levy can have on an already fragile tourism industry.
According to Da Breo, the GHTA delegation made it clear to the Permanent Secretary that they are not prepared to accept the Levy as it could result in a decrease in stay-over arrivals.
While not disclosing the five alternatives put forward to Government, Da Breo said the association believes that these are other areas that can generate much needed revenue for Government.
He added that although the administration is in need of money, however, the imposition of such a tax will have negative effects on the industry.
Da Breo said that the GHTA was promised a quick response from the Mitchell-led administration on the issue.
Vice President of GHTA, Russ Fielden who also attended the meeting, pointed out that they are not prepared to accept the $5 Levy that was put forward by the government.
Within days of the announcement of the 5% levy, former Director of Tourism, Simon Stiell, the current Parliamentary Secretary for Agriculture announced on a radio and television programme that if the levy was causing concerns among hoteliers it could be withdrawn by the government.
The levy was announced during last week Tuesday’s $933,932,530 million Budget of Revenue and Expenditure for 2014 presented by Prime Minister Mitchell.
Dr. Mitchell informed Parliament that the decision to implement the Levy came following discussions with stakeholders.
However, the GHTA said the NNP administration held no such discussion with them about implementing the levy.
GHTA Executive Director, Pancy Cross, said her members first became aware of the 5% tax on stay-over visitors from a local newspaper report.
According to the finance minister, the funds collected from the levy will be used exclusively for marketing Grenada and will be collected by Government and channeled to the Grenada Tourism Authority for the sole purpose of marketing Grenada.
Government is looking to earn $2 million from the levy in the first year of its existence.
The GTA will from January next year become the marketing agency for Grenada’s tourism product, replacing the Grenada Board of Tourism which as a statutory body relied solely on funds from the state to carry out its functions.