9th August 2021
Your Excellency, Ms. Dileeni Daniel-Selveratnam
Governor of Anguilla
Government House
Old Ta
Anguilla
Your Excellency,
In light of our membership outcry and outreach, as The Board of Directors of the Anguilla Hotel and Tourism Association (AHTA), we are moved to bring to your attention, for your reflection and consideration, some strong sentiments and concerns expressed by our AHTA membership.
By way of introduction, the AHTA membership comprises and reflects the interests of a diverse cross-section of approximately one hundred and sixty-eight (168) largely Tourism and Hospitality private sector enterprises of varying types and scales, including accommodation properties (hotels, villas, guest houses), restaurants, ancillary hospitality services and allied members from other related sectors.
We attach for your convenience and reference, a copy of our letter, dated July 14th 2021, addressed and delivered to The Honourable Premier of Anguilla, expressing our range of concerns, which were lodged in advance of the passage of the GST Bill.
Since the passage and Assent of the GST Bill, we have collated and highlighted related and additional concerns under various headings below, in a summary format for your convenience, and stand ready to provide more detail through discussion or follow up letter, should you require.
I GST – Complicated/Cumbersome and Onerous Tax Choice
The GST by its very nature is complex and complicated and requires a significant amount of technical, financial and human resources to implement, administer, comply and seek refunds. The majority of Anguilla’s business sector is not prepared to effectively manage this compliance process and is being set up to fail. The public sector also, will need to divert valuable resources to administer and enforce compliance of this complex tax system, as opposed to creatively facilitating a positive investment climate to give rise to increased employment and taxes generated through the expansion of business. Other less burdensome revenue and cost savings alternatives that were presented by the private sector were not genuinely debated and considered.
II Public/Industry Consultation Process Was Inadequate and Incomplete
GoA has had 13 months to consult with the people of Anguilla on the GST Bill and failed to hold adequately meaningful town hall meetings and real consultations with the community to look for alternatives and/or to hear the true concerns of the business community and the people they employ. The GoA’s request for consultation and suggestions of alternatives to GST appeared to simply tick the boxes and go through the motion, very rapidly. The final Bill did not reflect the concerns vehemently expressed through the limited consultations. The end result was that the Bill was rushed through and it did not reflect the will of the majority of the people.
III Cost of Doing Business on Island is Already Overwhelming
The cost of doing business in Anguilla has taken a sharp upturn since the Covid-19 Pandemic began in March 2020. Supply and demand issues have raised the prices on most consumable inputs needed for the hotel and restaurant industries, and have also increased shipping costs due to higher fuel prices, the limited supply of containers, and available space on ships. Prices have as much as doubled on some critical inputs over the pandemic period. Business overheads also have skyrocketed – Anglec fuel surcharge just went up and supplies and related protocols for Covid-19 (PPE) and cleaning supplies have placed an added cost on all businesses, in a time when sales are drastically down. Business for the 2020/21 season ran at about 30% of “normal.” The pandemic is not over yet and we have no idea on how the upcoming season will unfold.
IV Need for More Creativity in Increasing Revenues and Streamlining Costs
There have been many well-thought-out, private-sector presented alternatives, both revenue- raising and cost-saving in nature, that needed to be thoroughly assessed and ventilated with open mindsets and fair consideration. Due process of this genuine consultation and discussion did not unfold, resulting in a passage of the GST Bill that was premature and not optimal.
V Restaurant Sector-Specific Concerns
All sectors will be dealt a blow by the introduction of GST, but in this example, we refer to the example of the restaurant sector to highlight the anticipated financial impact on hospitality staff. Coupling 13% GST with 15% service charge, comes to 28% added to final restaurant bills, which is unheard of. Restaurants are already talking about eliminating service charge to avoid offending the guests and losing business. Staff relies on service charge as a major part of their compensation. Tipping of staff will also be negatively impacted by the GST add on. All in all, the restaurant staff will experience a significant downturn in their monthly earnings with the introduction of GST.
VI GST Connected to Onerous Guidelines and Stringent Penalties
There are severe complications in introducing a new tax system so soon after Hurricane Irma and in the midst of an ongoing Covid-19 Pandemic, considering the added expenses put on businesses by the need for better accounting practices, both to pay the taxes accurately and to claim refunds. The punitive nature of the penalties, as written in the legislation is frightening.
Your Excellency, we graciously appreciate your time and attention in considering our concerns listed above and on the attached letter.
We wish to respectfully request that the relevant authorities consider repealing the GST Bill and seek a more palatable, less debilitating alternative to meet the budgetary requirements.
Sincerely,
The AHTA Board of Directors
