Government Must Not Kill The Golden Goose – Small Hotel Suffers 50 Percent Hike In Land Tax Valuation
Just when you were beginning to think that it was almost impossible to absorb anymore increased operational costs and stay in business, out of the blue comes yet another surprise. This time for us, its a 50 per cent hike in our Land Tax Valuation.
The number of hotels that have closed over the last 16 years now exceeds thirty and that fact surely cannot have escaped the authorities. Their closure doesn’t seem to indicate improved viability in the sector or that the value of the accommodation property has dramatically increased. So where on earth can there be any logic in re-assessing our small hotel upwards by over 16.6 per cent per annum for the next three years?
Of course, we can object, providing we do it within 30 days of receiving the notification, but a week has been lost already, as the assessment apparently took a week in the post to reach us from Bridgetown, judging by its issuance date. To give that objection any real credibility, we would have to have a professional valuation undertaken, which again takes time and at speculative additional cost. In our case, valuers have indicated at least $7,000 and at a time when we are probably experiencing one of most difficult trading periods for decades.
Recently the BTA Chairman was reported in the media that we, individually in the tourism sector, have to do more ourselves and be less reliant on the ‘national marketing agency’. In reality, that is what many of us have been doing that for years in the absence of any ongoing state agency programme specifically supporting our product and market.
So where do we find this unbudgeted for $7,000 plus, and lest we forget the 17.5 per cent VAT which adds another $1,225?
I doubt if you took a straw poll at this time that our hundred plus small hotels would be averaging an occupancy rate of 25 per cent. Despite this most of their expenses still have to be paid. Electricity, insurance, water, statutory obligations, security and staff among fixed costs. Many larger properties have been driven to widespread discounting, taking some to the brink of insolvency, with a few being saved from possible bankruptcy only by the financial propping-up of associated companies.
Also of concern is the apparent widening of the understanding gap between the public and private sectors. Of course clearly the motivation is different, but no one should loose track that the private sector generates the funds that Government spends.
Destroy the entrepreneurial spirit and drive of our small businesses through inhibitive taxation and the inevitable result will mean much higher unemployment and any hope of accelerating economic recovery.
What also alarms me is that before these revised valuations were sent out any discussion does not seem to have taken place with the various professional bodies, trade associations and our policymakers. This would at least give the impression that Government is genuinely concerned about business sustainability and in some cases, survival.
The recent words uttered by the Secretary General of the Caribbean Hotel and Tourism Association, when describing the current state of this industry may well resonate for years to come, ‘Government must not kill the golden goose, but the goose is already half dead. There is not much more to kill’.