It is now just 36 hours before the General Sales Tax is implemented, and whether you like it or not, as of Saturday you will be paying the General Sales Tax. One group that doesn't like it one bit is the Belize Hotel Association. As we've reported, the hoteliers are up in arms because the accommodation sector will be exempt under GST. That means that they will pay GST but they won't get any refunds. Hoteliers say the results could be disastrous and this morning, 48 hours before GST they spoke out. Here's what they had to say.
Maria Otero, General Manager - Radisson Hotel
"In 2004 we didn't make any money, we lost money. In 2005 we were able to make a little bit of money. So I cannot tell right now what's going to happen but with a 63% on the 50% total revenue of the hotel, most likely it will be very hard to make any money."
Not making any money, that is what Maria Otero says could happen to Belize's second largest hotel, the Radisson, if gob goes through with its planned GST on the accommodation sector. Otero is the Radisson's general manager.
Maria Otero,
"We will be paying on our room revenue. We will be paying the 9% to the BTB and because of that, and being on the exempted list, we will not be able to claim back any credits from any investments that we do to the rooms. If we need to change beds or mattresses or any investment like the soap or the shampoo-all the expenses that go directly to the rooms we will not be able to claim any of that. We are talking about a lot of money."
How much money? Well the Belize Hotel Association says the new tax will cost the industry $5 million. Mariam Roberson is the BHA's president.
Mariam Roberson, BHA President
"The effects are not looking good for the industry under that classification."
Keith Swift,
Is the bottom line that room prices will go up?
Mariam Roberson,
"I am not sure what people will do to offset the bottomline. Diffeent hotels operate differently. It will definitely drive the cost of operation up and when that starts to happen, people will start increasing rates. That has already been happening. We will be losing to the tune of $5 million within the hotel sector but won't be able to claim back, we will be paying into the government in the form of input costs but we will not be able to claim it back. That is the biggest cost that it will be to the industry."
An analysis from accountant Stanley Ermeav says the ten percent GST will be
equivalent to a 63% tax increase on hotels. A similar analysis by Cedric Flowers said just the opposite.
Keith Swift,
The 63% is key because while that is what Ermeav said, Mr. Cedric Flowers did an analysis for BTB and he said the hotels will not be worse off, in fact he said it would be revenue neutral and the accommodation sector might be better off because of the GST. What do you say to that?
Mariam Roberson,
"I did see the Cedric Flowers report. We don't disagree that we are in the same situation as with sales tax. It is not a wrong statement that he is making. We are going to be in the same situation as the sales tax. The difference is that every other industry, in every other business in the country is being removed from that. Why can't the tourism sector, the accommodation sector, be moved from that."
And that is why after months and months of unsuccessfully negotiating with government, this morning at the 11th hour before GST day, this group of hoteliers still had hope that government will listen to them.
Mariam Roberson,
"We have been told that they will review it and that we still have time to review it."
Keith Swift,
Do you actually believe that? The GST comes into effect on Saturday.
Mariam Roberson,
"We're not going to get out of exempt (status) within two days. That was not our focus. We realized that from last week. We are not going to get out of exempt."
