Hear Us, Oh Skerrit
Private Sector Organisations Ask Again for Relief from VAT in New Budget
The list of ailments for which the private sector is seeking relief from the new budget, ranges from energy costs to visitor safety; from air access to the abaist nuisance that is the Value Added Tax (VAT).
The private sector organizations were evangelical about getting these matters resolved, and while a press release provided few details of their demands, The Sun has obtained documents which outline their gravest concerns and prescriptions for a more permanent cure.
On the issue of visitor safety, the private sector grouping recommended increased police patrols in Roseau at night and in and around crowded entertainment areas, as well as increased use of security equipment including CCTV. For the long term they recommended job creation, particularly for the youth, and development of sports, the arts "and other social programmes."
A number of recommendations were made to increase visitor arrivals and spend here. Among these were support for the Access Committee "to fully implement recommendation made in Access Strategy and Implementation Plan."
"Urgent negotiations required with LIAT regarding establishing reliable and affordable routes between Dominica and French neighbouring islands of Guadeloupe and Martinique, as well as between Dominica and San Juan," the document presented to Skerrit stressed.
In order to lower the cost of travel to Dominica, the group proposed the government subsidise fares by EC$100 per passenger half of which would come from government and the other half from the private sector.
"Competitive rates regarding travel to Dominica, via air or ferry, are required to stimulate sales to Destination Dominica. Most hoteliers and some tourism operators are having to discount heavily to attract business. This approach is not sustainable, as the margin of profit is minimal and does not allow for ongoing upgrades, ongoing professional HRD (Human Resource Development), among others which prevent members from remaining as being as competitive as they need to be," the private sector said in the document.
To combat high energy costs, the grouping asked Skerrit to negotiate with the Dominica Electricity Services (DOMLEC), for reduced rates between 7pm and7am. "This could serve to increase the kilowatt hours demanded during DOMLEC's excess capacity period in the short term. In the medium term it will make investment in the tourism, commerce and manufacturing industries more attractive, and thus increase demand overall," they contended.
The most contentious and vexing issue, however, remains the VAT, described in the documents as "a double taxation to the visitors." In the past, the prime minister has refused to reduce or review of the tax on the hotel sector. Still, they recommended that VAT "not be charged on a non-compulsory service charge" and a waiver of penalty and interest charges on late payments of VAT on service charge. In order to improve competitiveness, the hotel sector also called for a reduction of VAT on all tourism services to 10 per cent and a reduction of the tax on the accommodation sector to 7.5% or lower.
"We re-iterate that reducing the VAT applied to the tourism industry will improve the competitiveness of our sector, will significantly increase sales and will ultimately contribute more revenue in taxes," they argued.
All of these recommendations have financial implications and the private sector will follow Wednesday's budget presentation, hoping that the prime minister won't prescribe the same medicine that sickened the patient in the first place, offering doses that give an illusory sense of relief while the underlying malady worsens.
Instead, they will hope that somewhere among the $14.7M allocated to tourism and legal affairs, or the 46.5M earmarked for public works, energy and ports; somewhere among the $45M allotted to the ministry of finance or anywhere among the over EC$475 million budgeted for the next fiscal year, Skerrit will send a clear signal straight into their collective cerebral cortex that he won't tiptoe between the status quo and shattering their faith in him.
This, after all, would likely lead to fresh paroxysms of pain and weeping, and, possibly, paroxysms of fury.