Wednesday, April 24, 2024

VAT rate hiccup


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Yet another revenue measure from the August 13 Budget has run into implementation problems.
Like the proposed consolidation and municipal taxes, new Value Added Tax (VAT) rates on hotel accommodation and Direct Tourism Services (DTS), which were scheduled to take effect from today, October 1, are still in abeyance.
In the 2013 Budget, Minister of Finance Chris Sinckler indicated that in its continuing efforts to reduce overhead costs and place the tourism sector on a more competitive footing, the new VAT rate on accommodation in the hotel sector would be 7.5 per cent from October 1, 2013.
“Additionally,” Sinckler said, “from that same date, Direct Tourism Services will be brought in line with their accommodation counterparts at 7.5 per cent, down from the current rate of 17.5 per cent. This should cost the Treasury approximately $9 million a year.”
However, with the effective date looming for the new DTS, businesses in the sector sought clarification from Government specifically on which services would be affected so that they could make the adjustments in their pricing.


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