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Sigh of relief as tax breaks continue

Retailers, restaurateurs and hoteliers are breathing a big sigh of relief as Government’s Budget kept in place tax breaks for their struggling sectors.

Premier Paula Cox said the payroll tax concessions for the hotel, restaurant and retail sectors have been extended in the 2012/13 Budget.

Philip Barnett, president of Island Restaurant Group, said the Restaurant Division of the Chamber of Commerce was “extremely grateful” that the Premier had extended the payroll tax relief for another year.

“This is going to be a huge help for most, if not all restaurateurs, to continue slogging away at trying to outlive the recession, and return to better days,” he said.

Paul Telford, director of rooms, at Rosewood Tucker’s Point, said: “It’s certainly a welcome decision and shows that there is a clear understanding of the difficulties facing the hotel, restaurant and retail industries.”

The Chamber’s Economics Advisory Committee, headed by Peter Everson, said the overall absence of increases in general taxation “has been well received by Chamber members”.

“Our restaurant, hotel and retail members are also pleased to note that their much-needed payroll tax relief has been extended,” Mr Everson said.

Mr Barnett warned last year that ending payroll tax breaks would be disastrous for his sector, which he said had yet to recover from 2008 when dining out plunged 40 percent on average.

He said that under the payroll tax concession for his sector, the employer portion of payroll tax is deferred and written off. Hotels, he said, get both the employer and employee portion deferred and written off. Payroll tax is around 4.75 percent.

In her Pre-Budget Report Premier Cox had said payroll tax relief was among the “tax expenditures” being reviewed for the 2012/13 Budget. She said Government could make more than $20 million in additional revenue if it ended payroll tax relief for hotels and restaurants.

Retail sales activity has declined every month since March 2009 with the exception of August 2011, which was flat.

Boosted by a surge in convention business and new service from WestJet, Government said the number of overnight/air visitors grew from 232,262 in 2010 to 236,038 in 2011, an increase of 1.6 percent. That followed a drop of 1.5 percent in 2010 and double digit declines in 2008 and 2009.

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Published February 27, 2012 at 9:04 am (Updated February 27, 2012 at 9:03 am)

Sigh of relief as tax breaks continue

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