By Kurt Campbell
[www.inewsguyana.com] – Alliance For Change (AFC) Member of Parliament Catherine Hughes says her involvement in the local tourism sector over the last 20 years has caused her to become conscious of the unrealized potential the sector holds for transforming Guyana by moving into non-traditional revenue streams that can boost the economy.
She said her contribution to the budget debates following her examination of the document is to show where she believes the Finance Minister could have done better and put more money in the pockets of ordinary Guyanese.
“It starts with the organsiation of the Ministry of Tourism, Industry and Commerce itself. How such a sector with all this potential, be lumped with other major sectors like Industry and Commerce. How can we expect the international marketplace to take us seriously when initiatives to move this sector forward have been put on the back burner for decades?”
In this regard, the AFC MP told the House that the need for an autonomous tourism ministry is overwhelming. On the point of training, she said the announcement of funding for a hospitality training institution is one which the Party applauds.
“Many might be unaware that in several Caribbean Tourism destinations and elsewhere governments have allowed the tourism and hospitality sector to pay a lower rate of VAT than the standard rate. In the Bahamas the standard VAT rate is 15% but for their tourism sector its 10%. In Barbados the rate is 17.5 % but a concessionary rate of 7. 5 % is applied to the tourism industry. Similarly in Dominica the rate is 15% but reduced to 10% for the tourism sector. In Jamaica they go even further, the rate is 16.5% and a reduced rate of 10% plus a guest accommodation room tax which is dependent on the number of rooms a hotel has is applied,” the Legislator said.
Hughes reminded that the private sector in Guyana lobbied hard for such an approach long before the implementation of VAT; however the tourism industry is taxed heavily like any other sector.
She believes the challenge for Guyanese is that other destinations have granted preferential VAT treatment to their tourism and hospitality sector which makes local product more expensive. In this regard, the AFC member recommended that the administration implement a reduced rate of VAT for the tourism sector, and give the industry a ‘jump start’.
Hughes pointed to the fact that interior locations are eligible for a wider range of incentives that those in Georgetown, which has created an unleveled playing field.
“I would be the first to state that I am excited with the development of our eco lodges, community tourism programmes in places like Surama and their commitment to improving standards and quality but I think it is necessary and only fair that these incentives be given across the board to all participants.”
She added that the plight of the small hotels is very similar. Hughes pointed to special government funded programmes to brand small hotel in markets like St. Lucia and Barbados, adding that, such an approach is necessary in Guyana.
She criticized too the near 300% duty placed on 4X4 vehicles which has made acquisition impossible for legitimate tourism businesses.
“May I suggest therefore that in this budget we allocate funds to accurately calculate the contribution of our tourism industry to the GDP… please add to my budget, funds for proper marketing plan, and if our dear Minister of Finance would like to suggest there is no money for this, we in the AFC would like to suggest that he use the funds from the departure tax to fund such a campaign as was promised many years ago,” Hughes told the House, adding that “the issue here is of allocating limited resources to best use and with a few local hotels up for sale and legitimate hotels experiencing low occupancy rates I question your figure of a 76% occupancy rate across the industry.”
She reiterated too that the government had no right to take funds from the national reserves to build another hotel.
“That should have been left to the private sector… and yes money from NICIL belongs to the people of Guyana and should be included as revenues within this budget.”