The Government of St. Lucia has embarked on an exercise to strengthen the legislative environment for the development of the Tourism Sector. The Government wishes, inter alia to:
Below are some of the comments submitted by members so far:
Generally member are of the view that the incentives regime has been focused on providing support to foreign investors in the "hotel" sector so as to ensure that their investments are profitable and holidays in St. Lucia are cheaper than they otherwise would be with little regard to the benefits the people of St. Lucia and the country as a while derives.
Members also expressed that the enclave nature of the hotel sector limits the linkages between that sector and the wider economy. The manner in which incentives and concessions are provided only serves to encourage this. (Concessions discourage local purchases)
Hotels are given incentives and concessions for creating “employment”. Other sector create employment as a natural course of doing business, labour is a critical and indispensable input into the service process but they get no concessions or credit for doing so.
Members noted that when Covid-19 struck, thousands of workers were casually thrown into the ranks of unemployed almost overnight. Many of these fall under the rubric of working poor and were left to fend for themselves. As a condition for tax concessions, the new incentive regime should require that this large sector should create unemployment insurance (in lieu of taxes)
Members argue that the sector is too heavily "incentivized and dependent on being given concessions" and has been extremely successful and profitable. But this has come about with low paying jobs, unstable and highly fickle employment. GOSL needs to find a way to incentivize better paying jobs.
Members proffered that the tourism sector as the largest economic sector should make a greater contribution to the tax coffers of the country. This would allow the country to invest in the high-quality infrastructure and costly services this sector argues it requires.
Incentives and concessions should carry conditionality's related to social and economic stimulus.
The theory of linkages that predicated the incentives and concession’s philosophy appears not to be congruent with widespread all-inclusive properties and pursuit of unbridled vertical and horizontal integration.
Incentives and concessions should not make one sub-sector more competitive or profitable than another. Incentives and concessions should not bring about distortions to investment decision making and returns to investment.
To incentivize locals to participate and to have a chance of success there is need for supporting subsidiary legislation and institutional set-ups to encourage and finance their participation.
Standards including Insurance concerns, sometime prevent locals from providing services in the lucrative subsectors (tours, activities and services) must be democratized. Government intervention is required to make access to insurance easier through group policies for service provider.
Government must ensure that standards are not arbitrarily set as they can become barriers to trade and entry in the Tourism Sector. Independent monitors or regulators must be engaged to ensure that the Standards are fair, practical, useful, and more importantly a level playing field exists for al providing the services.
The industrial and trade policy of St. Lucia must be synchronized to ensure there is harmony and consistency. For example, if certain sectors are reserved for locals, then licenses should not be available and distributed to non-nationals and the true beneficial owner needs to be established prior to award of licenses.
If incentives are granted to hotels to conduct certain services already being provided by local service provider it creates an unfair situation where the independent provider becomes more expensive and the hotel costs are being subsidized by local tax paying providers and citizens.
Incentives and Concessions should be available for conduct all activities and services provided to visitors on an off property, from laundry to kitchen, baking, ice-cream making, (equipment) cleaning and maintenance equipment, tours and services Boating fishing etc. for example.
Incentives and Concessions should be made accessible to the entire tourism (sub-sectors) sector based on the assessment of the realistic and reasonable expectation that the following will be achieved inter alia; employment creation, foreign exchange earnings, increase consumption of local products and services generated by locals, help achieve balanced regional economic development, investment in renewable energy, increase use of reusable energy, positive impact on the environment, mitigate climate change, impact on per capita incomes. These outcomes must monitored and beneficiaries of incentives and concessions must be held accountable and should be subject to incentives and penalties based on performance.
GOSL should also identify social welfare indicators that firms should be encouraged to meet, corporate social responsibility programs, wage levels, employment of youth, women, persons from disadvantaged communities to name a few and incentives and concessions can be increased based on performance.
Some members also pointed out that the manner in which incentives are structured discourages, by the sheer difficulties and bureaucratic obstacles local procurement.
Members who have been able to access existing incentives and concessions were highly complimentary of the incentives saying they make a significant difference between profitability and lack of viability. Members are invited to submit any comments additional comments that they should have on the matter.
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