Tax Policies Must Protect Tourism


Stuart BoweFollow the dollar multiplier and it’s clear that ‘Tourism is everybody’s business’.  More than 50 cents out of each dollar in every Bahamian’s pocket came from a tourist.

Whether you are working at the front desk in a hotel, operating a hair salon in the city, selling cars in the community, a nurse at a Family Island public clinic, a linesman for BEC, an independent business owner, or a cashier in a grocery store; more than half of that dollar in your pocket came from a tourist.
Last year’s tourist spend was estimated at $2.4 billion in The Bahamas.  That spending created over 97,000 jobs, sustained hundreds of Bahamian businesses of all types, and produced more than half of the country’s tax revenue.

The tax revenue generated by tourism supports education, public safety, healthcare, roads and infrastructure, and all Government services and activities.  

Next time you see a tourist, give them an extra special smile. It’s likely they chose to visit The Bahamas because of our incredible natural beauty, the hospitality of our people, and our location to the major markets.  Increasingly, the cost of the vacation is the key factor in making the final decision.  That’s why it is critical now more than ever before that tax policies do not make it more expensive to vacation in The Bahamas.

Our country is poised for unprecedented economic growth, with tourism leading the way.  A host of major tourism investments have made their debut or will soon come on line. Public and private projects include the expanded Lynden Pindling International Airport; the Marsh Harbour Airport in Abaco; new roads and public infrastructure; upgraded cruise ports; and improvements in downtown Nassau.  Private sector investments include Resorts World Bimini Bay; Baha Mar; Memories Grand Bahama; and upgrades and new product offerings by Atlantis; Grand Lucayan; Comfort Suites; the British Colonial Hilton; Melia; Sandals and small hotels throughout the Family Islands.

This progress is being overshadowed and in jeopardy by the pending plan to implement a Value-Added Tax this July. In its current form the VAT tax threatens to affect our competitiveness, business viability and the more than 97,000 direct and indirect Bahamian jobs created by a growing tourism industry.

The Government’s current VAT proposal would have an unintended cost impacting all of us by slowing the recovery of the tourism industry, shrinking the economy, and reducing the amount of the nation’s foreign currency reserves.  Initial estimates show VAT as proposed raises the cost of a family vacation to The Bahamas by at least $500.  Faced with this, potential visitors would opt to go to less expensive destinations, as many already do.  We would all suffer the consequences.

The Bahamas Hotel and Tourism Association fully recognizes the fiscal dilemma facing our nation and believes it will take a concerted effort to address it.  That’s why we are working as an industry and with the nation’s broader economic stakeholders on alternative solutions.  The solutions must account for how tourism remains competitive.   Over the coming weeks we intend to quantify our recommendations.

In principle, we propose that the country considers a Smart Tax plan approach that protects the tourism industry, government revenue, the overall economy and employment opportunities now and into the future.

Tourism for a Better Bahamas, a group of Bahamas Hotel & Tourism Association members and stakeholder groups who collectively employ tens of thousands of Bahamians, is calling on the Government for a revised Smart Tax plan that would keep tourism strong.

By maintaining current tax levels on tourism-related businesses—like lodging, food and beverage, casino gaming, conventions and meetings, attractions, excursions, marinas and luxury retail—the country can stimulate travel growth while implementing tax reform.

A Smart Tax approach would also look to other options for raising revenue, considering matters like a shared payroll tax, the regulation and taxation of web shops, improving tax collection methods, reducing waste and fast tracking Government efficiencies and fiscal reforms. 

With all that’s at stake, we’re asking all Bahamians to support a Smart Tax by going to     Tourism is everybody’s business.  Let’s get it right!

Stuart Bowe is the President of the Bahamas Hotel & Tourism Association. He currently serves as Senior Vice President and General Manager of the Coral/Beach Towers at Atlantis.

By Stuart Bowe
President, Bahamas Hotel and Tourism Association