The Barbados Hotel and Tourism Association (BHTA) is renewing calls for stand-alone restaurants that earn significant foreign exchange to benefit from the same waiver of taxes and duties through the Tourism Development (Amendment) Act (TDAA) 2014, as their counterparts attached to hotels do.
In a statement released this morning by CEO of the BHTA Senator Rudy Grant it was suggested that the six-year-old amendment was always out of touch with the realities on the ground.
“Since the TDAA was passed into law, the BHTA has been continually seeking to ensure that the benefits conceptualized through the TDAA are realized for both hotel-operated restaurants and stand-alone restaurants which meet the agreed foreign exchange criteria. Those restaurants which are leased out by hotels are considered as stand-alone and treated in the same manner as restaurants which are not attached to hotels. The former does not benefit from any waiver of taxes and duties,” said Grant.
He further pointed out, “Restaurants which are owned and operated by hotels derive limited benefits from the waiver of taxes and duties through TDAA. However, it is important to note that the majority of restaurants owned and operated by hotels do not receive the waiver of taxes and duties for all of their food and beverage.”
Grant’s comments were in response to the abrupt closure of Cin Cin by the Sea, Primo Bar & Bistro and Hugo’s Barbados, which left 149 employees on the breadline. In a memo sent to staff and pasted at the front of each restaurant, the upscale eatery chain owned by CHAPS Restaurants Ltd, explained that the decision to close was based on declining revenues due a to fall in guest spend, increased government taxes and “unfair” duty-free tax concessions given to restaurants attached to hotels but not to standalone restaurants.
The restaurants’ financial situation was also blamed on the 2.5 per cent increase in VAT, an additional five per cent levy on restaurant bills. Today CEO of CHAPS, Joanna Pooler, reportedly stated that new investments were being sought to save the company.
In his statement, Grant revealed that Government was prepared to review the criteria for accessing the TDAA and that the BHTA was willing to meet with management of CHAPS to determine if they could assist in any way to salvage the company. He also noted that broadening the base for restaurants that can access the TDAA would also assist in making Barbadian restaurants more globally competitive.
“The BHTA has conveyed to Government that the benefits of the waiver of taxes and duties, as contemplated in the TDAA, could also be provided to stand-alone restaurants provided that they meet an agreed foreign exchange earning criteria. These discussions are ongoing, and we have been informed that Government is reviewing the entire Fiscal Incentives Regime,” Grant revealed.
He added, “There are many BHTA stand-alone restaurant members that, from reports, are operating effectively without the benefit of the TDAA concessions and with the increased taxes. There is no doubt that access to the benefits provided in the TDAA would make our restaurants more globally competitive. In all market segments, visitors are closely assessing the value for money proposition to assist in determining where they spend their money. Of course, this does not only relate to price competitiveness but also includes other important variables.” colvillemounsey@barbadostoday.bb
