“As far as I know we are not going forward with the US$5, we are not going ahead with the US$5.”
Those were the words from Parliamentary Secretary in the Ministry of Tourism, Civil Aviation and Culture, Senator Brenda Hood as she informed the Senate last week Friday about the new head tax of US$5 per night on stayover visitors at hotels as proposed by the ruling New National Party (NNP) administration.
The tax, labeled as a Tourism Marketing Levy, is meeting stiff resistance from the Grenada Hotel and Tourism Association (GHTA), which normally supports the government of Prime Minister, Dr. Keith Mitchell.
Addressing the Senate debate on the 2014 Budget of Revenue and Expenditure last week Friday, private sector representative, Senator Christopher De Allie expressed concern about the manner in which government announced Levy to raise revenue for the newly created Grenada Tourism authority (GTA).
De Allie believes that stakeholders should have been consulted before Dr. Mitchell in his capacity as Minister for Finance announced the measure in his Budget presentation on December 10.
He said that part of the tourism stakeholders concern with the planned Levy was that contracts were already signed for the 2013-14 season and some into 2015 and if the hoteliers now have to pay that US$5 head tax, it will amount to half a million dollars that hotel owners will have to pay from their own pockets.
He told the Senate that there should have been more consultation on the issue by government and in addition the political directorate did not properly present it.
Accepting Hood’s disclosure that it will not be implemented, Sen. De Allie said that the information brought forward by the government member was new to him.
When contacted Monday morning for comment on the issue, President of the Grenada Hotel and Tourism Association, Ian Da Breo, in a telephone interview with The New Today said that they heard the statement from Sen. Hood but his organization is yet to receive an official response from Government.
He stated that as a result of this new development, the GHTA is unaware which of the proposed alternative recommendations put forward by the association was accepted by government.
A meeting was held last week Monday between members of the GHTA and Permanent Secretary in the Ministry of Finance, Timothy Antoine following Government’s announcement of the Levy where the Association put forward a five-point proposal to government as an alternative to the US$5 Levy.
Da Breo, while not disclosing the five alternatives put forward to Government, said that the Association believes that there are other areas that can generate much needed revenue for Government.
He told The New Today that the hoteliers know Government is in need of money but imposing the $5 Levy will further dampen stayover arrivals in the Spice Isle.
He said that the GHTA proposals were accepted favourably by PS Antoine and a response is expected soon from the Mitchell administration.
GHTA Vice President, Russ Fielden who also attended the meeting with PS Antoine was adamant that the hotel body is not prepared to accept the US$5 Levy.
The new tax was announced three weeks ago in the EC$933.9 million budget in which PM Mitchell informed the nation that the decision to implement the Levy came following discussions with stakeholders.
However, the GHTA maintains that the NNP administration held no such discussion with them on the tax.
Prime Minister Mitchell told Parliament that the levy will be collected by Government and channeled to the newly created Tourism Authority for the sole purpose of marketing Grenada.
Dr. Mitchell disclosed that government had anticipated that the levy will yield EC$2 million in the first year of implementation.