Minister of Finance, Camillo Gonsalves, has defended the new tax to be imposed on hotel rooms effective June 1.
Parliament on Thursday passed a law that will see hotel occupants paying US$3 per room for the first 30 nights of their stay.
The Climate Resilience Levy will go to the Contingency Fund, to help St. Vincent and the Grenadines (SVG) respond to and mitigate against the effect of climate change, the minister said.
He said the climate levy is not a novel concept and was not created in SVG, adding that such a level exists in the Cayman Islands, the British Virgin Islands (BVI), Aruba, and Trinidad and Tobago, which, he said, charges 0.3 per cent on all corporate revenue for what is called a Green Fund Levy.
In the Unites States Virgin Islands, the minister said, the charge is levied on hotels and condos.
St. Kitts and Nevis, the Seychelles, Mexico, Malta, and Spain also have similar levies, Gonsalves told Parliament.
“All of them have environmental levies and more, Mr. Speaker,” he said, adding that some of these countries apply the tax at the airport.
e said that in the BVI, every person who enters the country has to pay US$10 at the airport as an environment charge.
“That’s one way to do it.”
He said that Fiji has “a maximalist view”, charging 6 per cent as an environmental levy “on almost everything — accommodation, rental car, restaurant, night club, taxi, chartered flights, water sports.
“The honourable prime minister reigned me in. He said, ‘That is a bit much, but we can start with the accommodation’,” the finance minister told Parliament.
He said another question the government considered was whether the levy should be charged on a room or a person or at a flat rate.
Another question was whether it should be collected at the hotel or at the airport.
He said Barbados, St. Lucia and Grenada charge an environmental levy on every item entering the port.
Kingstown, in consultation with tourism stakeholders, decided to apply it as a US$3 per night per room, Gonsalves told lawmakers.