Hoteliers in St Lucia in Quest of a Better Tax Deal

The St. Lucia Hotel and Tourism Association (SLHTA) is calling on Government for a better tax deal, which should involve the revamping of the tax regime.

While acknowledging that tourism has considerable potential to act as the main engine of St. Lucia´s social and economic development and should be treated as a strategic development priority, the Government has in the past two budget presentations announced increased taxes on travel and tourism.

In a position paper released ahead of this year´s budget presentation, the Hoteliers noted that while taxing travel and tourism was politically seductive the long-range implications of excessive taxes in the industry could prove sobering, the Caribbean Media Corporation reported.

According to the SLHTA, St. Lucia´s policymakers did not understand that the sale of travel and tourism to international visitors was an export activity and consequently taxes on the industry represented taxation of an export.

"Sound economic policy for competing in the global market place states that taxing exports is self-defeating and should be avoided.

"Taxes on exports reduce competitiveness in the global marketplace, and in an age of reducing trade barriers, taxing exports is a practice that runs contrary to worldwide efforts to streamline free trade," the association advised.

In light of this hoteliers are demanding action to match the acknowledgements and are recommending that tax officials compile a complete picture of individual travel and tourism taxes and compare this level with other strategic economic development priorities.

They also suggest that taxes that inhibit the competitiveness and vitality of travel and tourism should be avoided and policymakers should apply the same standards to travel and tourism exports that are applied to manufactured goods.