#Providenciales, Turks and Caicos Islands – May 13, 2020 – The Hotel and Tourism sector of the Turks and Caicos Islands will inevitably lose 44 per cent of its workforce in the coming weeks as the coronavirus continues to hold the global travel and tourism industry hostage.
Recommendations
emanating from an April survey, commissioned by the Turks and Caicos Hotel and
Tourism Association, TCHTA and conducted by KPMG are direct.
Government
should support a Staff Retention Program.
Government
should work with lending institutions to secure low interest; low risk loans to
cover debt.
And
Government should defer tax payments and waive penalty fees and interest
charges for tourism businesses.
From
the survey report: “Most of the resorts
in question are amongst the largest in terms of revenue generation and therefore
tax generators. They indicated they had an exemplary prior payment record but
with the onset of the pandemic they were experiencing cancellations at
unprecedented levels and also had greater difficulty collecting receivables
from similarly impacted tour operators. Such receivables included significant
accommodation tax components.”
An
impressive, 73 per cent of TCHTA members have paid their taxes up to February,
but it is unlikely the Government will see any more revenue from the sector
anytime soon. There are no tourists in
the country and it appears the ban on in-pound passengers via flights or
cruises or pleasure craft will persist for at least three more months.
The
remaining 27 per cent, who did not pay taxes in February expressed this in the
survey: “All of the respondents who had
not paid their accommodation tax for February would support the deferral of
payment of this amount along with the waiver of interest and penalties and
would commit to pay all outstanding amounts.”
Loss
of this revenue to the Turks and Caicos Islands Government is already hurting,
and the report survey heralds that more fiscal pain is on the way. The majority of survey-taking TCHTA members who
have not yet paid taxes for February 2020, admitted that catching-up may not be
possible within this year at all, without government leniency.
“If
interest and penalties on outstanding amounts are not waived only 33% of the
respondents who had not paid their accommodation tax for February could commit
to pay all outstanding amounts in financial year 20/21.”
Add to the loss in
tourism revenue, the loss of economic activity predicated on tourism employees’
salaries. Already, 14 per cent of hotel
and tourism workers have been terminated and at this time, those employees reflected
in the survey are receiving around 55 per cent of basic pay.