A new daily levy risks deepening long-standing inequities in the industry, car rental operators warned on Tuesday as they pressed for formal recognition as part of the tourism industry rather than transport.
The levy was delayed to October 15 and reduced from $10 to $5 per day for the first seven days.
While some welcome the cap, many say the measure underscores a deeper issue: the industry’s continued classification under transport which requires it to charge the full rate of VAT at 17.5 per cent rather than ten per cent for tourism businesses.
“It’s like all they do is take. When do we get concessions?” said one operator, who asked not to be named. “They don’t label us as tourism but transport; it’s unfair. We don’t get duty-free, we don’t get roads fixed. Everybody else gets concessions, tax-free. We always end up paying more for doing things right.”
Paula Fernandes, manager at Select Car Rentals, said the $35 cap was a sensible adjustment, especially for long-term rentals. But she noted that the levy replaces the visitor permit book system, adding administrative burdens without addressing the sector’s core grievance.
“The permit books had challenges, but they gave us structure. Now, with the levy, there’s more red tape – more filing and monthly reporting,” Fernandes said.
She argued that the industry’s current classification under the Ministry of Transport is outdated and costly.
“Car rental doesn’t fall under the Tourism Development Act, so we’re paying the equivalent of about 27.5 per cent tax, compared to about ten per cent under tourism,” she said. “Over 80 per cent of our business is from visitors and returning nationals. We should be recognised as part of the tourism industry.”
The Barbados Hotel and Tourism Association (BHTA) appears to agree. Chief Executive Officer Ryan Forde said the association worked closely with the Ministry of Finance to assess the levy’s impact and advocated for a cap.
“We’re pleased government capped it at seven days because car rentals are among the most expense-burdened segments of tourism,” Forde said. “We’re still in talks with the ministries of finance and tourism to have car rentals formally recognised as a tourism product.”
Fernandes noted that the Barbados Tourism Marketing Inc. plans to launch a public campaign to explain that the levy will support beach maintenance and environmental projects, a move she hopes will help visitors see it as more than “just another tax”.
Still, she suspects the $5 rate may be temporary. “We’re happier it’s down to $5, but I think this is just the initial rollout. If it goes smoothly, it might go back up later,” she said.
Forde also encouraged independent operators to join the BHTA, saying a unified voice is essential for future negotiations. (LG)
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