Tourist tax changes advised

It has been suggested that Government consider changes to the Tourism Accommodation Tax.

The Report of the Standing Public Accounts Committee tabled in the Legislative Assembly last week made the recommendation to the tax, which is now called the Tourist Accommodation Charge.

This fee amounts to 10 per cent of the daily room rate charged.

PAC chairman Rolston Anglin said the Committee was concerned that not all TAT due to the Government had actually been collected.

‘Tourism Accommodation Tax receipts represent a significant part of Government’s annual revenues,’ he said. ‘It is important that adequate systems and procedures and trained personnel are in place to properly account for this revenue.’

Since the PAC’s report was based in part on the Auditor General’s Summer 2001 report, some of the issues raised and recommendations made have already been addressed.

However, the Department of Tourism confirmed Friday that many of the issues raised in the PAC report remain valid.

In reading his report in the Legislative Assembly, Mr. Anglin said the records of accommodation properties are not inspected to verify the accuracy of the Tourism Accommodation Tax.

At the time of the Auditor General’s report, the TAT was collected by the Treasury Department, but the Department of Tourism started collecting it in 2002.

The DoT said Friday it has not inspected the records of accommodation properties due to resource constraints, but would do so in the future.

‘We intend to commence inspections in the upcoming fiscal year,’ the DoT said in response to the question.

Mr. Anglin said the PAC noted that Government earns a reduced TAT when rooms are sold at discounted prices to tour operators.

The DoT said this is still the case.

The PAC offered two methods of avoiding the reduced TAT.

‘One suggestion is that the guest pays 10 percent on the actual rate paid for the room, instead of the discounted rate paid to the proprietor,’ he said.

‘Another option would be to change the basis of tax assessment from an ad valorem rate to a standard charge per visitor or per room night.

‘This would make tax assessment and collection much simpler and reasonably effective,’ he said.

Mr. Anglin said the standard charge could be graduated for the varying standards of accommodation.

‘A fixed charge would eliminate revenue loss through discounting,’ he said, adding that further research is required to assess the impact of such a change.

Another issue raised in the PAC report that is still valid concerned the software programme used to record TAT receipts not being integrated with the IRIS module, which is used to record receipts of all monies in the Government’s General Ledger.

As a result, total TAT receipts for particular properties could not be obtained and receivables are not properly recorded, the PAC report said.

‘Given the magnitude of TAT receipts, Government should use a proper accounting software package to account for TAT,’ Mr. Anglin said.

The PAC report also noted that there were properties operating as a hotel without a hotel licence, something which the DoT said is still happening.

Mr. Anglin said the Government should consult with the Legal Department to determine the Government’s liability should a guest be injured at an unlicensed property.

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