Taxation and Operating Costs for the Caribbean Hotel Sector

57FINDING6. Tax incentives in the hotel sector arelimited, while in some countries taxincentives for Manufacturing andAgriculture are continuous.RECOMMENDATIONGovernments should consider allowing longer tax concessionsfor hotels that improve on the infrastructure in the communityduring the construction phase.7. The structural costs related to Hotelsector are higher than agriculture andmanufacturing due to the higher capitaloutlay and greater need forinfrastructure.8. Hotels pay a series of licences and directtaxes all due on different accountingperiods during the financial year.Governments should consider allowing longer tax concessionsfor hotels that improve on the community infrastructureduring the construction phase.It may be more efficient for the Government to apply a newform of licensing on hotel operators. This can be a simplifiedtax scale combining: Property Tax, Hotel Licences, Pool license,Liquor licences and trade licences based on room count. Thiscan be in the form of a specific Hotel Trade Licence.9. Departure Tax is a tax levied ondeparting visitors and is a moderateincome generator for governments.However it is seen as a nuisance tax bythe visitors.10. Room Tax is an occupancy tax or hoteltax which is a sales tax on hoteloccupancy and is a moderate generatorof income in all countries researched.Departure tax should be added automatically to airline orseaport tickets and paid in by the airline or agent operating atthe airports or seaport.Room tax should be revised based on hotel size and concept.All-inclusive hotels have other income grouped with the roomrate. This may be an unfair application towards hotel room tax.11. The biggest operating cost is an emptyhotel room.12. Lack of awareness and understandingof hotel sector by some public serviceagenciesGovernments must view the hotel sector as a ‘business” andmust play an active role in creating an enabling environmentfor hotels to succeed. Such an environment must haveadequate airlift and fiscal policies which address land basetourism. Tourism should be included inGovernmentdevelopment plans.CHA and the national associations must embrace the publicsector agencies as partners of the hotel industry. It may be wiseto have a representative from Ministry of Finance and Ministryof Tourism in the national associations.Taxation & Operating Costs for the Caribbean Hotel Sector