The controversial Municipal Solid Waste Tax has been described as a punishment on the hospitality industry by president of the Barbados Hotel and Tourism Association (BHTA) Sunil Chatrani.
He told Barbados TODAY tourism players were already under financial pressure and the imposition of this tax was an additional burden on the island’s bread and butter industry.
Chatrani’s reaction to the provocative tax comes on the heels of much criticism and resistance from residents and business operators following the announcement of the deadline for paying the tax.
Property owners who have structures with an improved value on their land are required to pay the solid waste tax, which has been calculated at a rate of 0.3 per cent of the site value. The deadline for the first payment is July 28. The second payment is due in December.
“Basically this tax is punitive to the industry. It is a tax that is going to be very significant in terms of the effect on the individual hoteliers and the reason being, the tax is based on site value of their property,” said Chatrani.
“Our site, in terms of real estate that we own for the hospitality sector, is generally located on the coast line, which is the most expensive property in Barbados generally. So what you are going to find is that this sector is going to be affected the most with regard to this tax,” added Chatrani.
He said the association was currently putting together information to see the effect of the tax on players in the industry. So far the average an operator of a West Coast property would be paying in municipal tax is $50,000, he said.
“That is $50,000 more that we will have to pay in taxes. Now this is a municipal solid waste tax and it really has to do with the waste and all that. I understand the need for the funds but in fairness most commercial entities do not use the Sanitation Services Authority. We actually employ our own private garbage collection companies to do that,” he said, adding that some hoteliers were already spending hundreds of dollars in that regard.
“So we are being billed for something that we are not using and this sector has been referred to by many ministers as an export sector. They have also made the comment that they are going to remove input taxes and just charge us on output . . . This [municipal tax] is in contradiction to that comment. It is another input tax here that is gong to be punitive to the industry,” he lamented.
Chatrani said BHTA officials have been listening to the debate on the tax carefully and would be seeking an audience with the minister of finance to discuss the matter.
“And I am going to put the case to him and ask him to look at this as quickly as possible because we just simply cannot afford this. This is an industry that is supposed to be taking us out of the recession at this stage. This is an industry that brings in the foreign reserves and to be taxing us at this stage, this is a sector that will be affected the worst by this tax. Taxing us at this stage at this level, it doesn’t help us. It doesn’t help us to help the situation we are in [in] terms of the economy,” he added.
The hotelier said while he could not say now if the imposition of the new tax would affect employment in the industry, it would definitely prevent hotel operators from upgrading their facilities.