Despite introducing levies last year to ensure that room-sharing players like Airbnb make their fair contribution to tourism, it appears that Government is still working out kinks in collecting the revenue, chairman of the Barbados Hotel and Tourism Association (BHTA), Stephen Austin, has said.
In a speech at the BHTA’s third-quarter meeting, Austin noted that while several sharing economy operators have indicated a willingness to pay the tax, the current arrangements make it difficult. He contended that it was unrealistic for the Government to expect that these small businesses would have the accounting capabilities to ensure that the ten percent levy finds its way into the public coffers.
He said: “The sharing economy continues to be a platform that baffles Government and I am not sure the reason why.
“I recently met with BETA – an association representing some of the properties on the sharing economy platform.
“They expressed interest in paying the sharing economy levy and working with the BHTA and the Government in collecting taxes from this sector.
“We cannot depend on very small operators to hire an accountant and go through the process of each month paying the levies.
“The BHTA encourages the various agencies to offer better clarifications to the Tourism Industry as well as speed up the creation of the legislation governing all levies.
“It is imperative that the framework is created so that the industry can pay what is required and assist the Barbadian economy.”
The BHTA chairman noted that Airbnb and other international sharing firms have expressed their willingness to help Government collect the revenues. Austin noted that while many of the solutions put forward were still being fleshed out, it was certainly an avenue that was worth exploring.
A draft Memorandum of Understanding (MOU) between the Government of Barbados and Airbnb is presently being reviewed by the Chief Parliamentary Counsel, who prepares draft legislation to pass into law. The BHTA chairman is urging the Government to act quickly on putting this arrangement in place.
Austin said: “We will continue our discussions and build a partnership as we believe that all in the sector should pay their fair share to assist the recovery of the Barbados economy.
“Airbnb has already indicated that they would be able to collect the taxes and remit directly to the Government of Barbados, so we encourage the Government to pursue the MOU with Airbnb and start the collection of these levies.”
But the hotel association leader expressed concerns about proposed plans to use an advance filtering company called Netsweeper as the collection point for online taxes. He contended that this could impair the tourism industry’s competitiveness.
He explained: “The BHTA was informed through a presentation to the Board of Directors by Netsweeper that this company contracted by the BRA would be pursuing the collection of VAT online.
“It is the position of the BHTA that the revenue loss by Government is not in the area of the collection of VAT but as it relates to the collection of the shared economy levy.
“We were advised that VAT would be collected on a number of services within the sector. We have expressed our concern that this will result in increased rates charged to consumers visiting Barbados and could negatively impact our price competitiveness.”