SHTA says Vat delay not beneficial to hoteliers |23 June 2012

He also dismissed allegations that hoteliers are to be blamed for not retaining their earnings locally.

Speaking at a press conference yesterday, Mr D’Offay, who had just met the newly elected SHTA executive committee, said the fact that the Goods and Services Tax (GST) – which will be eventually replaced by Vat -- will continue to apply from July to December 31, means that taxes are being applied twice.

He said the GST is applied on foods, beverages and other consumables at the entry point and also when served to clients after cooked or processed at establishments.

He noted that the difference with Vat is that this is to be refunded.
Mr D’Offay said the measures just announced, “without any consultation between the Ministry of Finance and SHTA”, will hit hoteliers, who have already submitted their rates to tour operators overseas, who are marketing Seychelles.

“These are already printed in their brochures, which will remain valid until October 2013.”
On the other end, hoteliers will have to pass the add-ons to visitors’ consumables, not included in the holiday packages. The result is that Seychelles will end up being more expensive as a holiday destination, according to Mr D’Offay.

He also dismissed suggestions that the hotel trade was responsible for not banking their foreign currency earnings locally.

He  called on government to appoint an independent body to ascertain the situation.

“I am not saying that there are not hoteliers or other persons in the tourism trade retaining their earnings abroad, but to me it does not make sense to keep the funds in foreign banks with low interest, and pay 17%  in overdrfaft, which is what local commercial banks are charging.”

Responding to questions from the media, Mr D’Offay also admitted that there are segments of the tourism industry who keep their earnings abroad.
He added that with no foreign exchange controls, this is difficult to monitor.