Jamaica air arrival tax takes effect Aug. 1

By Gay Nagle Myers
The first of two new tax measures affecting Jamaica's tourism industry will take effect on Aug. 1, according to the Ministry of Finance and Planning.

All international visitors arriving by air in Jamaica will be required to pay a new $20 arrival tax, effective for tickets issued on or after Aug. 1.

This is in addition to a $20 arrival tax that took effect last October and a departure tax that is 1,800 Jamaican dollars (about $20), meaning that visitors arriving by air will soon pay $60 just to visit Jamaica.

The new tax will be rolled into the price of an airline ticket, just like the two existing taxes.

The taxes, which are listed among the fees and charges on each ticket, are collected by IATA on behalf of the scheduled airlines serving Jamaica.

Jamaica also taxes cruise arrivals $2 per passenger, but no change in that fee took place in the recent 2012-2013 budget debate.

A new accommodations tax, effective Sept. 1, is set at $4 per occupied room, per night for hotels with more than 100 guestrooms.
The tax is $2 per room, per night for hotels with 51 to 100 rooms, and $1 for hotels with up to 50 rooms.

The new accommodations tax is in addition to the Gross Consumption Tax (GCT) charged to tourism businesses (accommodations and attractions), which are passed on to hotel guests.

Jamaica had had an accommodations tax in the late 1980s, which was later replaced by the GCT on all goods and services, except that tourism businesses always were afforded a lower rate than the national GCT rate, according to Evelyn Smith, president of the Jamaica Hotel and Tourist Association (JHTA).

"Tourism businesses are allowed to charge visitors at a rate of 10% while all other sectors (shops, businesses, etc.) currently charge 16.5%," reduced from 17.5% as of June 1, Smith said.

The details of Jamaica's new air and accommodations taxes were hammered out in lengthy negotiations between the JHTA and representatives from the Ministries of Finance and Planning as well as Tourism and Entertainment last month.

The final version was a revision of previously proposed tax rates.

Portions of the airline passenger tax will be used to market and promote the Jamaica brand, not only in its core markets but also in emerging long-haul markets.

Tourism and Entertainment Minister Wykeham McNeill commended the JHTA and other stakeholders for finalizing a workable compromise.

"The measures provide a win-win situation and will ensure that the country meets its revenue targets while protecting the tourism industry, especially the small properties," McNeill said.

What still remains to be worked out is how the new accommodations tax will be handled for guests now booked for travel after Sept. 1, when the new tax takes effect.

In some cases, the hotels will absorb the tax rather than passing it on to their customers, since the tax was not in effect at time of booking, according to Smith.

For Caribbean and Mexico news, follow Gay Nagle Myers on Twitter @gnmtravelweekly.
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