CaribWorldNews, BRIDGETOWN, Barbados, Fri. Oct. 5, 2007: Caribbean hotels are excessively taxed a new study funded by the Eighth European Development Fund has found.

Researchers claimed that Caribbean hotels are overly taxed especially when it comes to room tax, import tax, and departure tax.

It claims this limits the potential of the region's tourism industry. The study, entitled “Taxation and Tourism Costs for the Caribbean Hotel Sector” and undertaken under the Caribbean Regional Sustainable Tourism Development Program, compared hotels from four Caribbean countries - Barbados, Dominican Republic, Jamaica, and St Lucia - and compared their competitiveness against hotels in Hawaii and the Canary Islands.

The report added that while there are some fiscal incentives for hotels in the Caribbean regarding the reduction or exemption of import tariffs on equipment and construction materials that run between five and 15 years, there is a need for governments in the region to act in coordinated manner and develop a strategy that aims to maximize profitability and increase investment through fiscal policies and other incentives.

“It is clear that it is not enough for Caribbean countries to have incentives for the development of the hotel industry if long-term returns on investment are below those that can be achieved in other parts of the world,” the report added.