Tourism Minister: Tax discrepancy between hotels and “live-aboard” operations being resolved

By Marion V. Ali
Staff Reporter

An ongoing dispute between hoteliers, primarily in the south and operators of “live-aboard” catamaran charters is being worked on with a view to finding some common ground in due course, says Minister of Tourism, Manuel Heredia.
Heredia told The Reporter that he has received reports of the ongoing dispute and that the relevant parties have met with the Belize Tourism Board (BTB) and that he has given the Prime Minister a copy of the issues raised.

The contention has to do with the nine percent tax that hoteliers have to pay, as opposed to a $10 per person fee charged to operators of “live-aboard catamaran charters. Hoteliers claim that the tax regime is more rigid on their operations, especially since the nine percent applies across the board, rather than on a per occupancy basis. They claim that there are loopholes that catamaran operators can use to elude paying taxes. They also point to the validity of an existing agreement that catamaran operators signed with the BTB in the 90’s, which was neither passed in the House or as a Statutory Instrument (SI), making it a legal document.

“My belief is that the way forward is by doing some amendments [to the existing agreement] or legislation or some improvements, and at the end of the day, start from there forward”, Heredia said.

But the problem delves deeper. The General Sales Tax Department (GST) has also gotten involved, with the intent to charge catamaran operators sales tax, retroactive to the past six years – the full period that the law allows for retroactivity. That would put many, if not all the “live-aboard” catamaran operators in a serious financial bind, with the bigger ones owing in excess of $2 million, and the smaller ones owing around $600,000 in GST.

This is not something that the minister agrees with. “I don’t believe that it should be retroactive and GST is insisting that it is supposed to be”, he opined to us. He assured however, that the matter will be resolved very soon at the Cabinet level.

Meanwhile, the GST Unit has indicated that they have initiated an audit of one of the live-aboard catamarans to determine its earnings and profits. The unit is not at liberty to share additional details while the audit is underway.

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