The Adrian Loveridge Column – Airbnb Should Be Taxed Like Other Businesses in the Sector
According to various media reports the controversial alternative home renting portal, Airbnb has already signed over 300 regulatory tax collecting agreements worldwide.
Bearing in mind the cash strapped situation our Government finds itself and the recent imposition of yet more taxes, which according to private sector spokespersons have further dampened spending and any hope of stimulating the economy, it is difficult to understand why our politicians have been so reluctant to follow the lead of these 300 other countries or territories.
Among the latest to sign-up and agree to collect tax contributions is the Mexican state of Quintana Roo which include the tourism popular beach destinations of Cancun, Playa Del Carmen and the Riviera Maya. Airbnb claims 73,000 listings in Mexico which includes 6,200 hosts representing 10,000 rooms in this particular state.
The regulation sets a 3 per cent state lodging tax, the first in Latin America, on all Airbnb facilities taking effect on 1st October 2017. Between the 6,000 plus offerings in Riviera Maya and another 4,000 in Cancun and Isla Mujeres, state authorities report that 270,000 tourists stay in Airbnb locations each year in Quintana Roo for an average of five nights in groups of three persons.
This latest regulation is the second to be implemented in the country after an identical agreement was signed with the capital, Mexico City, in July. The National and Bloomberg reported ‘that this new Airbnb levy equals what Mexico City hotels pay in taxes’.
We have some pretty big numbers in Mexico’ said Nathan Blecharczyk, Airbnb’s co-founder and chief strategy officer, who has a quoted personal net worth of US$3.8 billion, reported The National.
‘Home-sharing is very popular there, (Mexico) and the local Government is excited about the benefits we can bring’.
So to repeat the question I raised earlier, why is our administration so reluctant to follow the example of over 300 other largely tourism driven destinations to generate taxes which could help reduce the country’s crippling debt, while at the same time being so agreeable to granting unilateral tax concessions to singular players who have yet to add a single new additional room to Barbados and compound this by selling off other taxpayers assets at below market prices to others?
What is particularly irksome is that while this tiny minority of people are benefitting from the majority’s efforts and fiscal contribution, they are avoiding (and some may say evading) taxes that the rest of us are forced to pay in increasingly burgeoning amounts.
This, while at the same time that our outstanding (over 4 years) due and payable VAT returns remain unpaid, which in effect is propping up those paying little or insignificant amounts of taxes. In our own case, tens of thousands of Dollars are owed, without beneficial interest or penalties and it is difficult to imagine, it’s just our small business that is being victimised.
This can hardly be an exemplary model for encouraging small businesses to survive or possibly flourish. Government must finally understand that the only way we can hope to emerge intact from our current perilous financial position, is to assist practically those who could make all the positive difference.