Hotel tax returns improve following negative audit

DoT says most hotel owners now in full compliance

Almost 40 percent of hotel owners didn’t file statements to back up monthly room tax payments during a 2013 review of the Department of Tourism’s revenue collection process.  

In many cases, receipts or documents showing the number of guests that had stayed at the hotel were not supplied. Without that information, government’s Internal Audit Unit said it was not able to verify that the DoT was being paid the correct amounts.  

The department says it has introduced new measures which have vastly improved compliance following the findings of the Tourist Accommodation Tax audit report, produced in 2013 and released last month in response to a Freedom of information request. 

The proportion of hoteliers who failed to submit taxes on time or failed to supply supporting documentation, including proof of guest payments, was down to around 2 percent for the last quarter of 2014, according to Director of Tourism Rosa Harris. 

She said 1,236 receipts were issued by the DoT for tax returns during that time period, with 98 percent in full compliance. 

“Recent changes in the collection of information from tourist accommodations for tax collection purposes has contributed to a decrease in noncompliance and an improved accuracy in revenue collection,” she said. 

The Internal Audit Unit’s investigation looked at a sample of 120 Tourist Accommodation Tax returns for 30 properties over four months in 2011 and 2012.  

The Tourist Accommodation Tax is a 13 percent, per room surcharge by hoteliers and passed on to the government. It forms the bulk of the Department of Tourism’s revenue, typically bringing in between $10 million and $12 million every year, the report said. 

Hoteliers are required by law to pay the taxes to government each month and to supply accompanying paperwork to verify the payment. The DoT has the authority to make site visits and pull hotel records to ensure it is being paid the correct amount. 

The audit review warns, “During our audit we noted that 47 tax returns from 21 properties were not supported by statements as required by the law.” 

It adds, “In the absence of copies of statements supporting the tax returns, the unit will not have a basis for independently verifying the accuracy of the monthly tax returns received from proprietors.” 

It recommends that the DoT carry out independent assessments of the amount of taxes due from proprietors who fail to submit copies of statements to support their tax returns. 

The audit also points out that site and records inspections to verify the accuracy of tax returns were not being carried out. 

It states: “Based on our review of the management of Tourist Accommodation Tax revenue, Internal Audit concludes that this process is in need of improvement and cannot be relied on to provide reasonable assurance that the revenue objectives will be achieved.” 

The DoT says it has moved to resolve the issues highlighted in the report. Ms. Harris said that in October 2013 the department began to send reminder letters to properties that failed to supply the correct documentation, outlining what was missing and reinforcing the monthly 28-day deadline for submissions. 

She said this had proved effective. 

“The majority of properties have consistently submitted the required documentation and with that, property compliance has improved over the past year,” she said. 

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