Minister of Finance, Camillo Gonsalves. (iWN file photo)

Minister of Finance, Camillo Gonsalves has responded to concerns expressed in Parliament that a new hotel room tax passed into law on Thursday would affect visitor arrivals.

“I don’t believe so and I think that that is overstating the impact of the US$3,” he said of the Climate Resilience Levy, which comes into effect on June 1 and will see visitors paying EC$3 per room per night for the first 30 days of their stay.

The minister quoted the average rates at some hotels in St. Vincent and the Grenadines and put the levy in context relative to the rates.

“You are talking about 1 to 2 per cent. You’re talking about somebody coming to spend at Grenadine House $150 a night and you are telling them that for the environment you have to pay $153, not $150. That’s going to thwart tourism in St. Vincent and the Grenadines?” he said in response to opposition concerns.

“Then the argument you’re making to me is that tourism in St. Vincent and the Grenadines is competitive solely on price. And I believe that that is a false argument.”

He said SVG’s competitive advantage in tourism has never been price because the nation is one of the most expensive destinations to get to.

“And the budget minded tourist doesn’t come to St. Vincent and the Grenadines. He can get a cheaper stay in Jamaica if he is coming from the United States or Greece. And, Mr. Speaker, it doesn’t take into account other factors that go into price competitiveness, like the departure tax, for example, which is twice as high in St. Lucia, but St. Lucia has a vibrant tourism sector.”

Gonsalves said such an argument also doesn’t consider various customs duties, hotel accommodation tax, service charges and “the very generous incentives that we give to our local hoteliers here…

“And I submit, Mr. Speaker, and we would borne out by the data, that a $3 charge on an average of $150 per room is not going to be the determining factor in whether someone comes to St. Vincent or how long someone stays in St. Vincent or whether they come back to St. Vincent because we have a unique and special tourism product here…”

Gonsalves said that SVG is expecting larger numbers of tourists.

“And we have to recognise that with this influx of tourists will come environmental costs and we have to deal with it and the tourists are not upset about making a small contribution to the environment of the beautiful country that they have come to visit.

“I believe, Mr. Speaker, that this particular piece of legislation would enhance, protect our environment, will contribute to our contingency fund, will improve our readiness, in the case of disaster, will help us, both before and after, the eventuality of a natural disaster and I think it will have minimal to negligible impact on tourism, on tourists and on this wonderful product that we call St. Vincent and the Grenadines,” he said.

18 COMMENTS

  1. Wonderful product, not in the eyes of C.Ben David. Then again, the money has to come from somewhere. Climate change is real, therefore, we ought to have some sort of funding for whenever disaster strikes. As far as I’m aware, the Minister said there were consultations with Stakeholders/Hoteliers etc.

      • I suggest that Observer empty his bank account for the Gonsalves team. He thinks taxes are great fun. We can ask all other like-minded “clueless and shoeless” people to do the same. I am sure they will decline that offer, because….
        “Misery loves company”

    • It’s agriculture real as well? Why tourism seems to be only place where we seek to generate income when we used to have a vibrant agriculture sector? Well you will see the impact of this yourself within a year or 2 and hope you will share the same sentiment.

  2. Kmt…. We contribute more than that traveling to other countries, why is this an issue.
    The question I would rather ask if I were the opposition is where will that extra money be spent in improving the country and to show evidence of it when implemented,
    But on the other hand ask yourself this…. Why support a bill that will make the opposing government look better lols. It won’t benifits the NDP., simply

  3. No matter what excuse is used for putting on Taxes, the fact of the matter is this, that we should be reducing Taxes here in St Vincent and the Grenadines, rather than increasing them, if we have any real and serious intention in creating new jobs!

    The example of the Grenadine House Hotel, given by this very privileged Minister, if he is referring to the Grenadine House Hotel in Kingstown Park, is a very poor example indeed, and I do not know of any other Grenadine House Hotel, so perhaps he is referring to that one.

    As one understands it, that Grenadine House Hotel is hardly bereft of patrons to write home about. That would make me think that de bway is arn ah hiding fe nothing!

    Therefore, me say dat de young Gonsalves im ah flog the dead horse that im daddy done kill! Yo nah see! Dem carr help it dread. Like dem fren ah Venezuel, dem is jus Tax junkies!

    Poor we! We jus fool fool fo tek yet more of it!

  4. That’s so smart thinking I don’t think these people know anything about tourism instead of embracing them with incentives your pushing them away , the majority of tourist that come to the islands does save for years to come to our shores so good luck with that one and remember greed is one of the seven deadly sins ,remember word of mouth is the biggest seller or Killer.

  5. The best way to go about this is to in-cooperate this increase into the hotel room cost, so travelers who paid for air and hotel wont be hit with a bill at the end of their stay. The last time I checked they were using ECD, did that changed to USD. The $3 is it USD or EC.

  6. It only goes to show how much he knows about tourist some of them complain about everything even a dollar far less three .

    • You are Vincentian surely you would not have an objection to paying something to develop your country but what about those who are none-Vincentian? Would you want to go to St. Lucia, Barbados and other Caribbean country and told you have to pay an additional money to stay?

  7. Well well well Mr.Gonsalves simply ignored all the allegations made against him four months ago and continued to conduct business as usual as if those things never happened or mattered. Anywhere else in the world he would have had to resign after all that commotion and public outrage. Meanwhile, the young woman in question has had her life turned upside down. Can you really trust this man on anything?

  8. That’s all very well if a hotel is charging $150 that’s 2%. But if they are charging $100 it’s 3% and if they only charge $50 its 6%, $25 its 12%. So it is quite clearly a nasty tax on travellers if they are staying in hotels under $50 a night. It must affect small hotels more than the larger ones.

    • That does sound like a tourism killer! In my opinion, if the government were just simply better on managing money, they would not need this tax in the first place, nor would they need all the other new taxes, fees and tax increases. The reckless mismanagement of the peoples money has put the entire country in a very bad position. Too bad the people on the top do not listen to sound, proven economic wisdom instead of trying to impress the voters by spending future generations into a heavy burden of debt.

  9. I see why this country could never move forward because everything is so based in party politics. We have a country people, St. Vincent and the Grenadines. Is anyone thinking about her and her overall development, or are we so politically divided that we don’t know our a** from our elbow? The government is trying every means to raise money to run the country, Taxes are necessary to run a country. However, how many tax measures is the government willing to introduce to suck the life bread out of the economy? Imposing a tax on tourists to stay, no matter how small a tax that is imposed, is not the best interest in tourism development in our country right now. Additionally, the hotel associate has asked the government to defer the tax to a later date because they had already set prices for the upcoming busy carnival/tourist season, but the government could not even honor that. Therefore, you put the hotel owner at a disadvantage to either turn around and charge the tax or pay it themselves. The tourism produce in SVG right now need much improvement and levying tax just going to make it less appealing tourists. Let us look at the issues for what they are and let us stop blaming opposition and other faction for what is taking place and at the bigger picture. When have we because to entrenched with party politics that we cannot see the bigger picture? Come on Vincentians it is time we wake up.

  10. They are so desperate to fund there rubbish regime with it’s rubbish policies that they will tax tax tax wherever and whenever they can. They are bankrupt of money and bankrupt of ideas when it comes to the economy. In 17 years things have never got better, everything is worse now than before they came to power.

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