The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE government’s decision to exempt domestic travel from Value-Added Tax (VAT) has been welcomed by out island resort operators.

The Bahamas Out Island Promotion Board (BOIPB) president Shavonne Darville said that any increase on already high airfare costs to the out islands would have a “detrimental effect” to the growth of family island economies.

Minister of State for Finance Michael Halkitis recently revealed that VAT will not be charged on any form of domestic travel, confirming that travel by air, land and sea between islands will be totally exempt once VAT comes into effect.

Ms Darville responded by telling Tribune Business: “Any proposed increase in the already high air access cost to the out islands has a detrimental effect to the growth of Out Islands. That fact that VAT will not be assessed on domestic air tickets will aid in the ongoing Domestic Campaign jointly launched by the Bahama Out Island Promotion Board and The Bahamas Ministry of Tourism. Our aim is to increase out island visitor arrivals by highlighting the world renowned national treasures and experiences to be found in our islands and for Bahamians to renew or discover the magnificence of the islands of the Bahamas.”

Molly McIntosh, assistant general manager with responsibility for sales at Abaco’s Green Turtle Club, told Tribune Business: “ I think they need to postpone VAT implementation. It will be a disaster if they go ahead with the July 2014 date. We are not ready, it will raise our costs significantly no matter how you look at it. We are just seeing an increase in tourism, even with costs of airline tickets sky high, and for us to raise our prices now because of VAT would be suicide.”

Ms McIntosh added: “ If they implement VAT, as a small hotel we are going to have to pay for new programming on our computer systems, train our staff, probably hire an accountant and that is before any increases in food costs, electricity, everything we purchase to run the resort. I think there is a real risk of jobs being lost if VAT is implemented now. We have such a good team and have preached ‘service, service, service’ but if we have to lay people off due to cost increases, then our service to the customer will ultimately suffer. We just cannot have that, our reputation has been built on quality and good service.”

Stephen Kappeler, general manager at the Treasure Cay Resort, told Tribune Business: “Given the unfortunate lack of airlift domestically into several of our key out island destinations, like Treasure Cay, and that the few seats that are available to the Out Islands domestically are expensive when factoring in transfers to get there, it is keen business sense to not further tax at all this inter-island travel. What is needed next is a strategy to ensure Bahamian Residents and visitors alike can find seats to our most beautiful Out Islands.”