Former Tourism Minister, Philip J. Pierre has predicted that the government has the choice of either reintroducing consumption tax or reducing incentives to the tourism industry.

Pierre believes that the new administration of Prime Minister, Allen Chastanet, may be forced to introduce a travel tax.

He declared that the government must make one of the choices because there are limited revenue streams.

“If they have to continue with the promises that they have made of reducing VAT – they have reduced licences, albeit not by the percentage that they promised, they have no choice but to reintroduce consumption tax or even some form of sales tax, or they have to tax tourism or reduce incentives,’ Pierre said.

He added that the government may have to remove zero rated items that are not “vatable.”

Pierre explained that VAT had replaced consumption tax.

“What is important is the number of goods that are unvatable – that is the point,” Pierre disclosed, adding that the government can reduce VAT, but would also have to reduce the number of goods that are “non-vatable.”

He said:

Unfortunately, the people who buy the number of goods that are non-vatable are the lower income people and that is the challenge that the government has,”