More relief needed for hotels to help boost economy – minister
Extra tax reliefs for developers of hotels, restaurants and attractions are needed to boost the economy, Vance Campbell, the tourism minister, told MPs today.
Unveiling a new range of sweeteners for investors, Mr Campbell insisted they would put Bermuda in a better position to compete with rival holiday destinations in the Caribbean.
The changes follow controversy when Gencom, the developers of the $376 million Fairmont Southampton revamp, were granted relief related to applicable taxes for 15 years.
The Gencom deal gives tax concessions of between $121 million and $133 million over that period to the Fairmont Southampton owner.
The Cabinet has agreed that similar tax relief arrangements will be available for up to 15 years for new and revamped hotels; up to five years for a new restaurant; up to three years for an existing restaurant; and up to five years for an attraction.
Mr Campbell said the amendments to the Tourism Investment Act 2017 would permit the minister responsible for the sector greater discretion in the granting of relief to developers.
Planned amendments to the Act would also give the minister wide-ranging discretionary powers when dealing with hospitality developments.
He said: “Other competitor jurisdictions provide relief of up 20 years, and, in some cases more, for developers investing in hotels for both new hotel developments as well as the refurbishment of existing hotel properties.
“The Act permits a maximum of ten years of relief in the case of a new hotel.
“A grant for a longer period requires an act of the legislature specifically drafted for that purpose.
“It is my firm belief that these amendments will provide the added incentives for entities to invest in Bermuda’s tourism product and, by extension, provide wide-reaching economic benefits for our country.”
Mr Campbell said he would bring the measures back to Parliament after Easter.
Craig Cannonier, the One Bermuda Alliance Shadow Minister of Tourism, queried why a new hotel and a refurbished one would both get a 15-year tax relief.
Mr Campbell replied: “We are taking into consideration that we can have a very large scale hotel that’s being refurbished versus a boutique-style hotel that’s being built anew.
“For instance, one could cost $6 million … as for the boutique-style hotel, and the other could be a $35 million refurbishment for a large hotel.”
However, the Opposition has previously warned that granting such powers to the tourism minister and loosening regulations could lead to “mess-ups”.
David Burt first announced the changes in last November’s Throne Speech.
The Premier stated at the time that the tourism minister needed greater discretion when it came to dealing with developers.
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