In a bid to expand its tax net and capture all businesses that may evade its radar, the Government has revived the idea to impose general consumption tax (GCT) on overseas representation fees, but Jamaican hoteliers are rejecting it.

"We have already sent a letter protesting this tax, as you may be aware that once more your businesses are to be pushed to extinction," president of the Jamaica Hotel and Tourist Association (JHTA), Wayne Cummings, warned his members at their annual general meeting at The Ritz-Carlton Rose Hall on Monday.

Legislated in 2003

The tax, which would affect overseas representatives such as consultants, architects, public-relations firms, marketing firms, sales representatives and auditors, was legislated in 2003, but was not implemented due to what was described then as a difficulty in collecting it.

After six years on the books, the Government announced that the tax was to be imposed at a post-Budget press conference.

But the JHTA president has criticised the move as an additional burden that would serve as a penalty on the overseas representatives, who the country is dependent on to convince their customers to come to Jamaica.

Protectionist mechanism

Cummings said that on the surface, the decision seemed to be a protectionist mechanism to safeguard Jamaican firms.

"While there are a few companies in Jamaica that have the skills and possibly representation overseas, it is virtually impossible for a tourist industry the size of Jamaica not to depend very heavily on the world-class services of globally placed public relations and advertising firms," he argued.

This was not the JHTA president's only concern, he said he was also forced to write to Minister of Finance Audley Shaw seeking a meeting to discuss the extension of the reduction of GCT for the tourism sector.

The reduction was given as part of the stimulus package in December 2008 to help offset the financial crisis.

According to Cummings, GCT reduction was the single most important factor allowing hoteliers to survive today.

janet.silvera@gleanerjm.com