VAT backbone of Dominica’s economy – Douglas

Douglas said the government is willing to listen to the DHTA
Douglas said the government is willing to listen to the DHTA

Tourism minister, Ian Douglas, has said while the government is willing to take a look at the Value Added Tax (VAT) for the tourism sector, it must be done prudently since the mechanism is the “backbone” of the Dominican economy.

“The VAT is the mechanism that generates revenue to government’s coffers, so that we can meet our commitments,” he told state-owned DBS Radio. “And we do not want to take any action on the one hand that will seem like a relief and concession but on the on the other hand will be depriving the government and stifling our lifeblood.”

At its general meeting held last week, the Dominica Hotel and Tourism Association (DHTA) said it had written to prime minister, Roosevelt Skerrit, concerning the reduction of the VAT on the tourism sector arguing this could contribute more to the island’s economy.

The DHTA is proposing that VAT be reduced to 7.5 percent on accommodation, food and beverage and related tourism services “for all businesses in the tourism sector who depends 70 percent or more on the tourism for their business.”

But Douglas said the government must be careful and prudent when examining the VAT mechanism.

“If we give one concession to one sector of the economy, then we open the floodgates and there is no telling where it will end,” he stated. “So we really have to do the analysis to really come to a conclusion that if we reduce the VAT for the private sector, especially the hotel sector, will that actually equate to more arrivals and more heads in beds and will that compensate for the loss of revenue for the government, will it generate more business in the economy and so government in turn will probably generate more revenue through other taxes rather than the VAT.”

He noted that the government is willing to listen to the DHTA and its partners but “we must weigh it and balance it.”

“We are also listening to the advice from the ministry of finance,” Douglas said. “We are not opposed to granting the concession and lowering the VAT but at the same time we have to be careful; we cannot be careless. We have to be prudent.”

The VAT system came into effect on March 1, 2006. It is charged at the rate of 15 percent on goods and services. Accommodation in a hotel or similar establishment and dive activity is charged at the rate of 10 percent.

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  1. RastarMarn
    July 15, 2014

    Well is about time allyou start following the news around the region yeh,,,

    Look at what happening in Barbados and St. Lucia our sister states whom appear to have more manufacturing and tourism in their economic portfolio,,,

    Ian may be, by design establishing a foundation for the case of his next political ploy by putting all these mismanagement issues of the Skerrow administration on the table, his outrageous statements appear to be in error but this dude has been very conniving from time,,,

  2. William Mc Lawrence
    July 15, 2014

    WOW!!! VAT is the back bone of the Dominica economy… so what about Agriculture, Tourism, Manufacturing, Offshore/ Financial Services, etc etc etc… :lol: :lol: :lol:

  3. Anonymous
    July 15, 2014

    8-O :( :wink:

  4. LISTEN!!!
    July 15, 2014

    These guys are running a PONZI ECONOMY scheme.

    The money needs to becoming in fast and rapid every month or the economy will collapse…..because VAT is the backbone of the economy.

    Anything presented to this GOVT that involves economic growth that does not give instantaneous tax revenues to the GOVT they have no interest. Reason being, the economy cannot wait for short term or long term injection from taxes as it is a PONZI economy the GOVT is running.

    NOT LONG!!!!!!

  5. DD
    July 15, 2014

    This Ian guy. The “backbone of the economy”….REALLY …what fools we have running this country. Their nonsense is crippling the country while their own pockets get fat!!!

  6. As i see it.
    July 15, 2014

    How many times have this lazy, lazy, lazy Skerritt DLP Gov’t been warned that a country cannot develop by taxing, taxing, taxing with a 15% VAT on goods and services, plus other taxes imposed. Production. Production. Adding value to agricultural crops. If the other sectors are reeling back, tourism must fail.

    The Gov’t has neglected the productive sectors, that would make money, create jobs and boost the economy. We cannot improve the standards of living of citizens by handouts, increased taxation and almost total dependence on others from outside. We must find creative, innovative ways to create our own wealth in our rich, verdant country.

    DLP Govt. has failed the people miserably. Before you even receive pay, 15 cents on every $ is not yours. 15$ on every 100$ is not yours. 15% VAT.

    Just as Gov’t is stubborn and would not implement Electoral changes to make elections FREE and FAIR, so too Gov’t will not listen to the cries of the people to reduce VAT to ease up the pressure. Standards of living going down. Businesses closing down. Too much pressure DLP. Too much pressure. While a few bathing in wealth, the majority getting poorer and poorer.

  7. Garcon?
    July 15, 2014

    You meant to say vat, the red clinic, election campaign. massive corruption and fraud are th backbone of Dominica’s economy.

  8. Oh Come on.....
    July 15, 2014

    Dominica being marketed as the Nature Isle attracts those nature loving tourists, those adventurers, those hikers…. synonymous with those tourists who are not looking to spend much money. That is the clientele that come to Dominica. We do not even realize that the way we market ourselves determines what kind of people we attract. Although we are what we are, we must understand that these people who go hiking and diving, and would be interested in our natural beauty are the ones looking for cheap hotels to bunk, easy lifestyle. When they see our advertisements, it appears to be a place where one does not even need money to survive…. If we want to attract those who like luxury and our beauty we have to step up in our marketing and appeal to those who are looking for a luxurious natural getaway as well.

  9. The Facts
    July 14, 2014

    Understand this. If this tax is lowered, what next? How will the government compensate for loss of tax, approximately 8 percent, to the economy?
    It is a known fact worldwide when taxes are lowered, something else is increased. This is something to consider.

    • JoJo
      July 16, 2014

      Lady, have you ever considered that the tax burden can also be reduced by reducing costs?

      – Govt. should be looking at becoming more efficient
      – Govt. should look at doing away with services that are not strictly necessary. For instance, today every dept. still have its own messenger, often with its own transport. That is what I would centralise for a start, or even farm it out to a courier service in the private sector. And are all the GA registered vehicles necessary. So many we have it leads to abuse!


  10. tax tax tax
    July 14, 2014

    this man always speak the TRUTH can we remember the that conversation where Ian Douglas was so please to tell a strange on the phone that{ i gave pm skerrit my heart and soul} he skerrit lied to me several times.

  11. Lang Mama
    July 14, 2014

    Classic Ian Douglas – just like a child who innocently embarrasses the parents by innocently or merely or simply calling it as it is. No sugar coating , no deliberate lies. Just simply telling the visitor that Mammy is inside but she is not answering or that daddy is wrapping the grass in white paper.
    So Reginald Austrie and others can eat rocks if they want Ian will remain our 4 year old in the cabinet that will continue to embarrass those magicians.

    Somebody give Ian a candy bar as a reward. Somebody sing Old Macdonald had a farm

  12. Coco Town
    July 14, 2014

    To those of us who know Ian very well and I am sure that my handle Coco Town is more than enough to indicate that I know Ian very well- I am talking about preschool to St johns to PSS ( to include that famous joke at a Ross University PSS field trip, Coco Town to SIFOCOL, UWI and post UWI.
    Ian is a great guy , very loving, good intensions, doesn’t have an ounce of malice and very importantly it is not in Ian’s nature to be deceitful, cunning. Granted we have all told a lie or two and if there is one person who cannot conceal a lie it is Ian- you would pick it up right away. The brother is not good at lying.
    I am not here to make excuses for Ian a friend and school mate; in fact I really wish that Ian would disassociate himself from the current regime of deception, trickery, lies and deception. Ian is a misfit in this entire Kennedy Avenue show.
    It is in Ian’s nature to be honest again I know the brother. Ian is very loyal and Ian can also be very very unreliable and disorganized.Ian hates to disappoint people and so he makes commitments after commitments. Need I say more. Ians talks the plan but does not follow thru unless you put a leach on him.
    Notice that when Ian is telling a Lie in his capacity as minister in the deceitful Labor Party government Ian makes a total mess out of the situation. Ian is much more comfortable when he is telling the truth . In other words he is no Tony, Lennox Lawrence, Ambassador , Skerrit. Ian doesn’t have the instinct and so this is why Ian subliminally or not he is willing to speak to the news investigators. The other deceitful politicians in his party would rather run away.
    So when Ian spins a lie about the carnival cruise and the price of fuel on another occasion he will subconciencously tell you the truth that it is because Dominica needs to put certain things in place in order for the Carnival cruise to put Dominica on it’s agenda. Notice how he made a mess out of the Roseau River promenade project- just wait sooner or later he will sub-consciously reveal the truth.
    See how easy it was for him to reveal in the phone conversation with Trevor the truth about the cunning and malicious ways of Skerrit.
    So I am not surprise at the article here on DNO. Ian is again just being Ian. Ian isnot at all comfortable on this Kennedy Avenue show of lies and deceit. It is no surprise that when Ian sonce spoke the truth Tony Astaphan claim that he Ian read the document upside down. In other words Ian does work fit into the cast of characters.
    Ian bro I love you and like I always say to you take your rightful place in this so called Labor Party of infiltrators and con artists.

    • diaspora too
      July 14, 2014

      You are so right! and Tony does not like it one bit. left to him Ian would be out long time…
      Remember what happened when Sicko Seko called kairi on de talk show and he sellout Tony… and the melee goes on….

  13. shaka zulu
    July 14, 2014

    Just keep interviewing ian Douglas and the rest of the labour MPs and they will continue to reveal there level of incompetence. VAT should be temporary until the country gets on its feet through growth in private sector, manufacturing, export, tourism, agri, fishing etc ect….

    They must be doing pretty darn good cause bishop miser get Half million.

  14. CIA on the Watch
    July 14, 2014

    I still have not seen in the article posted where the Minister made the comment that VAT is the backbone of the economy, I see the headline of the article but no where in the body of the article did I see the minister utter these words as the headline, subject to correction on this one.

    • greg
      July 15, 2014

      “VAT is THE mechanism.” Notice he did not say a mechanism or one of the mechanisms. The . Phrase backbone is only metaphoric

    • Anonymous
      July 15, 2014

      Tourism minister, Ian Douglas, has said while the government is willing to take a look at the Value Added Tax (VAT) for the tourism sector, it must be done prudently since the mechanism is the “backbone” of the Dominican economy. Take a moment read and understand. It is only in school teachers say there is nothing like a stupid question to encourage students in the real world we say it is better to be thought of as a fool, than to open your mouth and remove all doubt.

    • CIA on the look
      July 15, 2014

      “The VAT is the mechanism that generates revenue to government’s coffers, so that we can meet our commitments,” he told state-owned DBS Radio. “And we do not want to take any action on the one hand that will seem like a relief and concession but on the on the other hand will be depriving the government and stifling our lifeblood.”

  15. CIA on the Watch
    July 14, 2014

    Like Danny Lugay Ian Douglas mis-spoke on this one so lets excuse him, he Ian is not that dumb

    • CIA on the look
      July 15, 2014

      In that case we await Ian’s apology

  16. Mr. Douglas
    July 14, 2014

    So what happen, a man cannot make a mistake ? I made a mistake in my speak. that article was not my final draft.

    • j
      July 15, 2014

      trouble is , once word leaves your mouth it can never be taken back.

  17. Anonymous
    July 14, 2014

    The man speaketh the truth. Probably the only politician who tells it like it is; if he means to is another story.

  18. Anonymous
    July 14, 2014

    Infant honesty.

  19. The Baptiste
    July 14, 2014

    While I am not a supporter of the VAT generally, Jo Jo has a good understanding of the principle of taxation and the economy, while Educator, tend to demonstrate not only his/her political bias, but a complete lack of understanding of the VAT as implemented by this administration, and its negative impact on the economy as a whole, and the hospitality industry in particular.
    It is not very encouraging at this time, when Dominica is known for producing some very intelligent persons in all disciplines capable of standing head to head with any other in any part of the globe, yet we have some graduates in economics currently in the country who by the appearance of things bungled so badly the implementation of the VAT that it has crippled the economy, and stifled entrepreneurship.
    VAT short for value added tax is a regressive tax that is applied to every stage of the production to market of goods and services produced within the country as well as to the raw materials required. Surely, by this method, it is the final consumer who is most disadvantaged, and usually most of those are the very poor. For the producer/provider, it is a burden that increases the cost of the product/service, thus limiting productive capacity, since demand may not be sufficient to allow profits for expansion, savings and/or investments.
    I am deeply troubled, and concerned that it appears, that either our institutions of higher learning is not adequately equipping our graduates to think, conceptualize, and effectively implement solutions. I get the strange feeling that they are taught, mostly to identify problems, but little or nothing in the way of finding and implementing solutions.
    The VAT as it now exists should be repealed and replaced with a tax regime that is more in keeping with our economic structure and situation, rather than the one size fit all of these international agencies, whose contributions contribute more to the creation and maintenance of corrupt administrations than economic development in most of the countries they advocate these retarded economic policies.

  20. %
    July 14, 2014

    Them fellas kill everything they met booming, now they telling us that VAT is the backbone of our economy. You can call them a cabinet of pots and pans, chau fets and pway lon. A useless and clueless cabinet. An insultive and DUNCE birds os a feather.
    That’s Why Change Is a Must.

  21. Too late
    July 14, 2014

    In a country where the government has done very little to grow the economy (FAST & FURIOUS please don’t comment on re surfaced roads,NEP, yes we care, red clinic and gas cylinders) the minister must say that VAT is the back bone of the economy. If the tourism industry were booming the first thing to his mind would be that the tourism industry is the back bone of our economy

  22. anonymous
    July 14, 2014

    Really Mister Minister!Really?Really? Really? VAT is the country’s main source of revenue? And all u said that the economy was growing! Well what is left to be heard and seen?

  23. Persistent Woman!
    July 14, 2014

    Ian doe tired embarrass Dominica? smh

    • scratching head
      July 14, 2014

      Ian is not embarrassing Dominica, he is speaking the truth. He says what is going on which a lot of us Dominicans do not want to hear.

  24. Persistent Woman!
    July 14, 2014

    Alas Ian, you mess up again. Sad comment.

  25. Jayson
    July 14, 2014

    I genuinely feel sorry for Ian. He doesn’t intentionally mean to screw up on every given opportunity, but he just can’t help it!

    Regie Austrie almost had a miscarriage after hearing about Ian’s comments!

    Ian you better check your email because I suspect your ‘supreme commander’ will be calling you to a meeting to explain why you keep shooting the ruling administration in the foot with your ‘insightful’ comments…

  26. Channel 1
    July 14, 2014

    VAT is the backbone eh. Boy is high time to vote Dominica’s most backward-thinking, LAZY and incompetent government out of office.

    These jokers so lazy, dem claiming that a tax is the backbone of the economy. Look a disgrace….

    Steuuuuuuuuuupppppppeeeeeessssssssss to the Dominica Labour Party government. All you are a complete waste of time. Phew!!!

  27. coyote
    July 14, 2014

    VAT is the backbone of the Dominica econmy? Not manufacturing,not agriculture but VAT. Well, well, well Dominique fini bat.

  28. Francisco Telemaque
    July 14, 2014

    Ian, such stupid sentiments come as no surprise. Whether we are talking about VAT; or any other tax; taxes by any other name is still tax.

    It is true that no country in this universe can function unless the citizens of the country pay taxes. Nevertheless, if in a country where the population is as small as ours, the dependency on Value Added Tax, as the backbone of the economy seems to indicate the economy is destine to fail!

    There are limits to the amount of taxes a government can impose on its people. There must be production of something, there must be some earning power on which the taxes can be levied. That spending power the majority of Dominicans lack.

    Even if the government impose unnecessary taxes on the tourist, that will not help, because when the tourist finds out that they pay more taxes in Dominica than elsewhere, Dominica will be omitted from the cruse ships itinerary.

    Ours will continue to be a struggling nation, as long as the government maintain the mentality that some foreign power will always give us a handout whenever they feel sorry for poor Dominica, or when they hear the name Nature island. Rather than the leaders of the country try to influence investors to come in and invest in industries, they sit around all day all year talking crap about Nature island.

    As Ian Douglas boast Dominica is the Nature island of the world! In reality he has declared Dominica the most primitive place on earth. If I was looking for a place it invest, and I heard of a place that was the Nature island of the world that place I would avoid, because I would consider that there has been on change on that island since creation

    How can a leader of a country conclude that a Value Added Tax is the backbone of a nations’ economy, that is outright stupidity!

    Francisco Etienne-Dods Telemaque

    • The Facts
      July 14, 2014

      You reside in the US. You should know and also experience high taxes. Ask Obama what he thinks of the US tax? I would assume he would make that identical or similar statement. In fact, every government of those countries would.

      • Francisco Telemaque
        July 15, 2014

        The Facts, in America, we pay taxes based on what we earn. In any event some of us go without paying taxes for years. Right now I am owing just a little more than ten thousand dollars in Taxes. I am privilege to be in a position where I can write it off.

        The reason I am owing that amount is because in 2012, I did not want to show a lost income, because I was buying something, and if I showed a lost, my debt to income ratio would have messed me up and I would have to either pay cash for that thing, or do without it.

        Mind you some people do not pay taxes at all. Most women with children filing as head of Household pays no taxes at all, as a matter of fact most of them gets back all in returns, and even more than they pay into the system. I never paid any taxes until my younger daughter turned eighteen years old.

        Right now I have no dependency, and since all the people I rent to; rent are subsidized by the State, they, knows how much money I am making annually, hence I must pay something into the system, however, depending on my maintenance expenditure, I can write every penny I spent paying gardener; repairs, or anything I spend on my prosperities, and my personal expenses, property tax, and insurance, medical expenses, expense of the motor vehicle I use in the service of my properties.

        So, its not as if people are burned with taxes here as in Dominica, You are taxed on what you earn in Dominica some people are assessed, the farmers are assessed, and do not tell me that does not happen, because my father paid taxes when he was alive, he made his living as a farmer, and did metal work in the village, if you travel through Wesley, most all of the security bars you see on the windows and doors of houses he was the man who built them.

        When they assess you in Dominica, they make people pay taxes on money which they did not earn, or have in a bank! I was assessed in Antigua, back there in the 1970’s

        Francisco Etienne-Dods Telemaque

  29. B Lion
    July 14, 2014

    I don’t think by reducing taxes in the tourism sector our tourism revenue will increase. Tourism should be taxed as it leaves the government with cleaning up responsibility as well sites restoration efforts. Tourist should not complain of our taxes unless they come from a non-taxed country, in which case we need the formula before we can do that. As long as it is reasonable as other destinations also do tax heavily unless under duty free concessions. Our main focus which is why our tourism sector in suffering is our lack of awareness of our natural environment’s upkeep. Our beaches like rockaway will show us that dead fishes on the beach is a must. Dig hole in man ground to escape poisonous gasses into our environment and water to poison our youths. Let go garbage in our pristine waters of sea and river and say that’s gud. That’s where we measure our tourism faith on the battleground..

  30. committed Dominican
    July 14, 2014

    That clearly demonstrates that this government barren, void, incapable of moving this country forward. It leaves the Dominican people with no choice but to vote them out.

  31. sad
    July 14, 2014

    VAT is the backbone of the economy—shame— but he’s being honest.

  32. Anthony Ismael
    July 14, 2014

    So basically, the Hon. Minister is simply telling us that there is no real economic growth on the island. And taxation is the main source of revenue.
    I do however, agree with him that government must be prudent in reviewing all request for a reduced rate of VAT. It would be interesting to examine the request of the DHTA in detail.

  33. MyOpinion
    July 14, 2014

    Why should it be the backbone of our economy?

    July 14, 2014

    mr douglas I nominate you to be the minister of the backbone of our economy, for short “MINISTER VAT”

  35. %
    July 14, 2014

    Ian together with the finance Minister Roosevelt Skerrit ( the most inept Finance Minister on planet earth) and the other DUNCE CATS in the Labour Party, obvioulsy do not see the link between reducing VAT, the creation of more jobs and then more or higher taxes collected. I wonder if neither Skerrit nor Ian knows the meaning of MULTIPLIER EFFECT. I will forever consider this corrupt and wicked Labour Party as an albatros over the necks of srtruggling Dominicans. They lack the capacity or ability to govern, and the entire country is being dragged into a precipice.
    These clowns need to hire the services of the esteemed Dr Fontaine, one of the Caribbeans MOST BRILLIANT ECONOMIST to help them!

  36. JoJo
    July 14, 2014

    Very sad comment by the Hon. Minister that a tax is the backbone of the local economy. I guess what is he really saying is that the VAT is the main source of Govt. revenue. Low taxes and duties are a sign of a healthy economy and if we could grow our real earnings we could lower our taxes. Low taxes stimulate growth and a govt should not be in the business of growing taxes but stimulating the economy with lower taxes instead. High taxes are counter productive.

    • July 14, 2014

      Low taxes are not the hallmark of growth. That is a conservative theory that hasn’t worked.

      • Frenz
        July 14, 2014

        So why it is that Laborites called Mamo a modara when she ask Dominicans to pay $5.00on hospital bills. Whay laborites cried foul when Mamo imposed 3% sales tax on some items.

        You Laborites are just to bent on fooling people. No wonder you appeal to the ignorant people and those to dependent on hand outs.

        When UWP was in power you Laborites campaign on corruption and the country’s debt. today our debt is 3 times that of the UWP days and the corruption level is 300% up. So you guys will look for all kind of straw to grab unto and to find ways to try and fool people.

        When patriots spoke about the neglect of agriculture people like you came on dNO to say agriculture is not viable and that agriculture based economy is doomed to fail – all of this just to support a man or party. How do you guys sleep at night knowing that you live a life of lies.

        We don’t need Ian Douglas to tell us that the Labor Party government has been about selling passports for personal gain, fooling poor people with crumbs from the table, none approach or concern for a productive economy- keep people poor and dependent.

        You come here with your arrogance or pretending to be smart. we know you are just another one of those hogs and brigands bilking to resources of the country. Show us the Labor Party manner of growth. is it toilets, a few Chavez bungalows, Is it a stadium built by chines or the resurfacing of the west coast road. Tell us you traitor

    • Calibishi Warrior
      July 14, 2014

      Why not do a little research on VAT rates across the world (or even in the region) before making a comment like that … here I’ll give you a little help ..
      Dominca’s VAT rate is pretty par for the course. Which ‘healthy’ economy out there is running without it?. I know we like to pretend that Dominica exists in some kind of vacuum … but really, it is not so.

      • Mamizoo
        July 14, 2014

        Calibishi Warrior why it is that you choose to make a point in a vacuum. While many governments utilizes VAT is VAT the back bone, life blood and spinal chord of these economies. are all these countries nurturing a non productive economy.

        We don’t exist in a vacuum but it convenient for deceivers like you to enter the vacuum when you intend to deceive. Why do we exist in a vacuum where electoral reform and voter ID is concerned . the last time I checked we were the only one in the Eastern Caribbean without Voter ID.. Why do we exist in a vacuum on the mater of the international airport; why do we exist in a vacuum on direct foreign investment; why do we exist in a vacuum on a non performing economy. Why do we exist in a vacuum where a small population feeding an oversized cabinet.

    • FORKIT
      July 14, 2014

      imagine the people who comment making those lunnytoons comments are ministers, de man actually saying that he and his government is bankrupt and cannot institute ideas to create government income except from tax..

    • joe
      July 14, 2014

      JoJo so how will the government get money?? Low tax stimulate growth, high tax is unproductive please explain how this statement is true.

      • .
        July 14, 2014

        @JoJo Ask Skerrit to do that research for you. Are you afraid of hearing GO TO HEKLL 3 times?

      • Anonymous
        July 14, 2014

        When a government keep raining taxes on its workers and productive sector they are in effect creating a stiffling or contraction of the economic sector’s ability to grow. People tend to spend less and less therefore hindering the multiplier effect of the dollar value on economic activity… hence the problems that most of our governments are experiencing. Why do you think that governments in the developed countries have instead been dumping millions of dollars into their economies… is to put more money into the hands of the consumer so they can start buying again. Therefore raising the confidence level of the people in effect stimulating economic growth. Our Caribbean governments on the other hand have chosen to kill the goose that lay the golden egg.

      • hmmmmm
        July 14, 2014

        When a government keep raining taxes on its workers and productive sector they are in effect creating a stiffling or contraction of the economic sector’s ability to grow. People tend to spend less and less therefore hindering the multiplier effect of the dollar value on economic activity… hence the problems that most of our governments are experiencing. Why do you think that governments in the developed countries have instead been dumping millions of dollars into their economies… is to put more money into the hands of the consumer so they can start buying again. Therefore raising the confidence level of the people in effect stimulating economic growth. Our Caribbean governments on the other hand have chosen to kill the goose that lay the golden egg.

    • B Lion
      July 14, 2014

      lower taxes may stimulate growth in our economy but with our small size and limited ability to harbor large crowds which would rob our natural beauty, a balance is necessary in order to achieve success. Our Gov. can still tax the tourism sector in this pristine environment being more exotic, and expensive to visit in a small way or even the same as other locations. If we were to give duty concession towards our local tourism product raw material importation alone would set us up more on par. That would enable us to keep our products wealth throughout our life spans. People seldom think about money when they consider rareness and uniqueness. Traditions lived on and natural living habits kept.

  37. Educaor
    July 14, 2014

    Before the hotel association approaches the government asking them to reduce the VAT they ought to make a business case that demonstrates that the existing VAT does harm to the industry or that reducing VAT is beneficial to the economy.

    That van be demonstrated in several ways: (a) increased business levels that bring in more revenue (more jobs created = more income taxes paid), (b) multiplier effect – increased indirect business activity, (c) increased profitability of the companies that provide services to the industry = more corporate taxes paid to the treasury.

    They should be able to bring numbers to the government to show it is a win win.

    • HIM
      July 14, 2014

      @Educator They have done that in the past. Educate yourself.

    • Malgraysa
      July 14, 2014

      You are right. Everyone, who charges VAT does so on behalf of the Govt. and if the hospitality industry can not demonstrate growth to compensate for a lowering of the Vat rate we are even further from home. Any shortfall in income for the Govt. as a result of such a move will mean that the Govt. will have to recoup that revenue elsewhere.
      In real terms , if the vat rate for the tourism industry is reduced to 7.5% they will have to double their sales in oder for Govt. to receive the same income from them, For every $1 million of turnover now they will have to generate $2 million. A very tall order!

    • observer
      July 14, 2014

      But how are they going to bring these numbers if the tax reduction is not implemented? Are you talking about pre-VAT period, compared to the current system? In that case, I would think they have the data already. Furthermore, I believe that the hoteliers are getting direct feedback from the visitors, and hence there push for the reduction.

      So gone are the days when banana (production) use to be the backbone of the economy, now VAT is king :). Mr. Minister we know what you trying to say, but as minister we expect you to use the right terminology. It comes across like you do not understand how the economy works.

      • Educator
        July 14, 2014

        Observer, there is ample information available from other jurisdictions that the hoteliers can use as a template for their study. They do not need to have empirical evidence from Dominica (post reduced VAT) to make their case.

        I am not suggesting the VAT should not be reduced, only that if it is reduced, there is a net benefit to the economy. Reducing VAT just because the hoteliers lobby group say do, it not a good enough reason to take action.

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