CASTRIES, St Lucia, Thursday, September 27, 2012 – The St Lucia Hotel and Tourism Association (SLHTA) breathing a sigh of relief as the the National Workers Union (NWU) threatened shut down of the tourism sector over government plans to apply the Value Added Tax (VAT) to service charge on hospitality industry employees has been called off.
The Dr Kenny Anthony administration issued a statement yesterday (September 26) informing hotel workers that they will not be asked to pay VAT on service charges.
“The Government of St Lucia wishes to reassure workers throughout the hotel industry that the service charge earned by workers will not attract VAT,” stated the government.
VAT goes into effect on October 1 this year and the NWU, the largest trade union here, had warned that the decision to implement of the tax on service charges would have a devastating impact on the tourism sector as some hotel workers depended on the service charge to improve their monthly salaries.
NWU president Tyrone Maynard said last week that the union would have “no other option but to shut down the various hotels” adding “we have communicated this decision to the St. Lucia Hotel and Tourism Association”.
The NWU received backing from the hotel association in its attempts to lobby government to change its mind.
A statement issued by the SLTHA revealed that it held talks last week with Dr Anthony, who is also the Minister of Finance, at which time they urged him to reconsider taxing the service charge.
“It is the SLHTA’s view that in the current economic climate, a VAT on service would be detrimental to business and employees alike. The SLHTA wishes to acknowledge the concerns expressed by the National Workers Union …and invites dialogue with the NWU and other stakeholders in this regard,” read their statement.
The hoteliers also said that their views and concerns on the service charge issue and several other VAT-related issues that affect hotels, restaurants, tours and attractions and many other segments of the SLHTA’s diverse membership, had been communicated to the VAT Office and the government and they hoped for a response from the authorities on these issues before the October 1 implementation date.