Hoteliers hit back at Guyana President tax criticism

The region's hotel and tourism association says Jagdeo doesn't know what he's talking about when it comes to how hard taxes are hitting the sector throughout the Caribbean.

MONTEGO BAY, Jamaica, - Guyana's President Bharrat Jagdeo is under fire from regional hoteliers for dismissing their concerns about high tax levels in the region as "absolute nonsense".

Jagdeo's comments, in response to the Caribbean Hotel and Tourism Association (CHTA) which had complained that governments were taxing hotels out of existence, were made during a press conference at last weekend's CARICOM summit in St. Kitts. 

"Absolute nonsense," he had said. "All they are fussing about is the taxes and sometimes they themselves do not look at their cost structure. When you look at how much a guest pays for a bottle of Coke in mini bar in one of the hotels, it is extraordinarily high. They have to look at the cost structure of the industry without constantly (seeking) to blame and go after the meagre tax that governments have from these places."

CHTA President Josef Forstmayr said the association's members were "most disappointed" by Jagdeo's "unfortunate" remarks.

"With all due respect, the CHTA is of the view that President Jagdeo speaks from a misinformed position on taxation in the various islands throughout the region and with little or no knowledge of the tourism industry and the contribution it makes to Caribbean economies," Forstmayr said, adding that it was precisely for this reason the CHTA delegation requested a place on the agenda of the just-ended meeting and any future CARICOM summit.

"It is quite obvious that our political leaders have a narrow and limited perspective on the far-reaching positive effects of tourism on our Caribbean economies," he added.

The CHTA insists that the hotel and tourism sector is a "tax-riddled industry".

It says the entire supply chain of the hotel industry bears too much of an increasing tax burden: workers are taxed, supplies are taxed, utilities are taxed and guests of hotels are taxed in several ways including at the hotel, on the airline and at the airport, sometimes with both arrival and departure taxes.

"CHTA would like to extend an open invitation to President Jagdeo, and anyone else misinformed, to a discussion forum on tourism to explore the overwhelming, sometimes immeasurable but undeniable impact that tourism has on our Caribbean economies," Forstmayr said.

He reiterated that CHTA was very disappointed that tourism was not an agenda item at the CARICOM meeting in St. Kitts despite the fact that three years ago CARICOM leaders decided to make tourism a regular agenda item at all their meetings.

The association pointed to the November 29, 2010 Caribbean Trade and Investment Report, 2010: Strategies For Recovery, Renewal and Reform, in which CARICOM said "Caribbean Governments have an important role to play in revitalizing the tourism sector" and acknowledged its duty to "ensure that taxation cost (room tax, departure tax, corporate tax and service charge) does not have too adverse an effect on international competitiveness."

Despite their acknowledgement, the CHTA said, CARICOM has still not embraced tourism as the number one generator of jobs in the Caribbean.

Statistics show that one in every nine jobs in the region is generated by travel and tourism, either directly or indirectly, and that the sector accounts for 12.8 percent of the Caribbean's economic activity.