The crucial tourism sector is to receive a major reprieve with its exemption from the controversial National Social Responsibility Levy (NSRL) announced as part of Government’s recent austerity Budget.
Outgoing Chairperson of the Barbados Hotel and Tourism Association (BHTA) Roseanne Myers told the association’s annual general meeting at the Lloyd Erskine Sandiford Centre this evening that Minister of Finance Chris Sinckler had given the assurance during recent discussions on the levy.
Myers said the minister informed her that the contentious tax would not apply to tourism-related companies covered by the Tourism Development Act (TDA).
The TDA significantly expands incentives for investment in tourism and hospitality beyond the traditional accommodations sector, including restaurants, recreational facilities and services and attractions which emphasize the island’s natural, historic and cultural heritage, as well as for the construction of properties in non-coastal areas.
Provision is made under the Act for investors in tourism projects to benefit from write-off of capital expenditure and 150 per cent of interest, and exemption from import duty, Value Added Tax (VAT) and environmental levy in respect of furniture, fixtures and equipment, building materials, supplies and equity financing.
“We’ve been in contact, actually up to today, with Minister Sinckler, who confirmed that the mechanism for accessing duty-free status under the TDA is also the umbrella legislation for accessing your NSRL exemption. The duty-free letter we now use is already updated . . . [and] now says, ‘free of VAT duties and NSRL,’” Myers revealed, while advising members seeking to take advantage of the concessions under the TDA to update the existing letter before submitting it to the Customs & Excise Department.
Nonetheless, the BHTA head said there remained several questions that needed to be answered to ensure there was clarity.
“If tourism is to be exempted, what about the other items that are not necessarily coming under the TDA? What about the pieces of legislation like the TDAA [Tourism Development (Amendment) Act of 2014], which are food and beverage items? What about the companies that are registered under the Shipping Incentives Act? And what . . . [about] those companies which are getting no duty-free concessions under any legislation?
“But under the TDA where the exemption for NSRL is promised, the question that we also have to ask is, ‘is there a way for us to increase the access under the TDA to include some of the very important segments of the tourism sector?’ That is one of the things we have to debate; and we can put a fast-track system in place to get those persons who want to access the benefits under the Tourism Development Act to get those applications in and processed quickly,” she explained, adding that the Ministry of Finance and the Ministry of Tourism had agreed that all sides would meet to hammer out the details.
While she welcomed Government’s intent to exempt the tourism sector from the the NSRL, Myers said she was concerned about its introduction.
“We absolutely salute the intent to exempt tourism. It is never the intent that is our problem . . . it is always the execution. And therefore we are suggesting that is something we have to work on,” she declared.