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Antigua & Barbuda Government extends sales tax to Airbnb operators

· Tax increase is intended to help the government cope with the shift in the tourism culture

Antigua and Barbuda has announced a one per cent increase in sales tax for short-term stays at hotels and Airbnbs.

As the government of Antigua & Barbuda tries to capture more revenue out of the tourism sector, it has announced a one per cent increase in the Antigua & Barbuda sales tax (ABST) for all short-term stays at Airbnbs and hotels.

Deputy Commissioner of Inland Revenue Department (IRD), Jermaine Jarvis, says the revenue from the tax increase is intended to help the government cope with the shift in tourism culture. Jarvis revealed that even though Antigua & Barbuda have been seeing an increase in the number of tourist arrivals, it is not reflected in the amount of revenue earned from the sector because many tourists are choosing to stay in Airbnb places.

Airbnb rentals have emerged as a cheaper and more popular option, perhaps a global trend for travelers who are hosted in the homes or properties of the owners. Jarvis made the point that, “If more and more people are shifting from the traditional hotel accommodation to these types of accommodation, it will have impact on the revenue that should be generated from the growth [in the sector]”.

“If more and more people are shifting from the traditional hotel accommodation to these types of accommodation, it will have impact on the revenue that should be generated from the growth.”

– Deputy Commissioner of Inland Revenue Department, Jermaine Jarvis

Jarvis explained that currently no monies are being collected from Airbnb type accommodations, and this is causing a decline in the amount of revenue that can be collected from room accommodations.

He posited, although the country has seen a growth in tourism arrivals, the increases are not reflected in the amount of revenue earned from the sector because many tourists are choosing to stay in Airbnb places.

Jarvis said the increase in arrivals is not reflected in revenues due to many tourists opting to stay in Airbnbs.

Hotel guests will be required to pay an additional one per cent in sales tax on all accommodation as of March 1, an increase over the current rate of 13 per cent, thereby bringing ABST for the sector to 14 per cent. Meantime, the ABST rate on all short-term boutique rentals will become applicable by June 1.

A forum will be held tomorrow for existing hotels and one on March 21 for small boutique hotels to discuss how the new changes to the ABST will affect their sales.