VAT and High Energy Cost Affecting Tourism Industry

With talks of an increase in Value Added Tax (VAT) circulating, Leader of the Opposition United Workers Party, Mr. Hector John is of the view that, any increase in VAT will further affect the struggling Dominican citizens, which is not what we need.

According to a post 2006 USAID-funded report on Impact of VAT and High Energy cost on the Tourism Industry in Dominica, it states Action is needed to reduce the impact of VAT and High Energy cost on Dominica’s tourism industry.

UWP Leader Hector John

Mr. John says this is a serious problem, and the government needs to take a turn in the right direction by creating employment, so that people will have more spending cash to circulate.
The Dominica Hotel and Tourism Association is of the view that, VAT is having a negative effect on the Tourism Industry.

The DHTA reiterates its position and notes that, with the imposition of 15% VAT resulting in higher prices of our tourism products and services, they have become uncompetitive.

Compounded with the reduction in cruise calls and the limited and costly access, the tourism industry is in dire need of assistance.

It stated that the enabling environment should be conducive to making business competitive and profitable, so that their economic contributions can be sustainable.

The DHTA added that, with regards to high energy costs, it should be noted that Dominica has one of the highest base rates for electricity in the OECS, even with hydro accounting for approximately 40% of the total electricity generated, we have seen regular increases in the price of electricity, with the cost for hotels showing an increase of 50-70% in a post 2006 two year period.

They also stated that, Tourism has the capacity to create more jobs than any other sector and its critical function as the “engine of growth” for the economy must not be underestimated.”

© 2012 SAT Telecommunications Ltd.

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