Legislators today commenced debate on a Bill to allow for the introduction of a Climate Resilience Levy to be paid by all transient or stay over visitors in hotels, apartments and short- term rentals.
This levy of EC$8 or US $3 per night forms part of the government’s new fiscal measures and comes as part of the government’s thrust to increase the source of revenue dedicated to respond to issues of climate change.
In 2017, a Contingency Fund was established and a levy on consumption was imposed by increasing the Value Added Tax (VAT) rate by 1% to provide a dedicated source of revenue to capitalize it.
In tabling the Bill in Parliament this morning, Minister of Finance, Camillo Gonsalves referred to the International Monetary Fund (IMF) Article Four Consultation here in St. Vincent and the Grenadines, in which it recommended that the government should increase resources for the Contingency Fund since the resources previously allocated are insufficient.
Minister Gonsalves said discussions were held with stakeholders in the local tourism sector. He noted that despite its importance, some stakeholders have expressed disagreement with the timing of the levy which is scheduled to be introduced as of May 1, this year.
According to Minister Gonsalves the expected revenue from this measure is estimated at $1.7million.
The Finance Minister said the funds in the Climate Resilience Levy which will go towards resiliency, cleanup and preservation efforts has benefits for the persons on whom this levy will be imposed, and he does not think this is an overly burdensome imposition.
Meanwhile, Opposition leader, Dr. Godwin Friday said the New Democratic Party (NDP) opposes the imposition of this Climate Resilience Levy.
Dr. Friday noted that while he has no problem with putting measures in place to fund matters arising from or related to climate change, they in the opposition consider the imposition of this levy of EC$8 per night, to be onerous on the tourism sector at this particular time.
Deliberations on this Bill will continue when Parliament resumes on Thursday April 26, 2018 at 10am.