New IMF Western Hemisphere Report Indicates Slower Tourism Growth in Latin America and Caribbean
Given slower economic growth and persistently high unemployment rates in the US and Europe — both key generating markets for tourism to Latin America and the Caribbean, it is not surprising that the IMF is forecasting slower tourism growth as well. In fact, for much of the Caribbean, the region is already experiencing weak tourism flows. According to the IMF, tourist arrivals have generally been increasing since mid-2009 in the Latin America and the Caribbean, but spending per tourist has dropped to 2004 levels.
To recapture lost revenue over the last two years, several Caribbean countries instituted a variety of tax measures, a few of which are worth repeating here:
Antigua and Barbuda
(1) Rolled back all VAT exemptions granted since 2007 and increased VAT rate for tourism sector from 10.5% to 12.5%;(2) increased stamp duties from 5% to 10%; (3) increased import duties; (4) increased Airport Embarkation Tax from US$25 to US$50; (5) increased fuel taxes
(1) Raised tax rates on vehicles, departure taxes, and taxes on hotel rooms.
(1) Increased VAT from 15% to 17.5%; (2) eliminated tax-free allowances for travel and entertainment
(1) Introduced VAT of 15% in February 2010. In October 2010, eliminated VAT on hotel service charges.
Click here to download the full economic report: IMF Western Hemisphere Economic Report Oct 2011.