Jordan's hotel tax will harm industry - trade association
The [Jordanian] government’s plan to reimpose a 16 per cent accommodation tax on the Kingdom’s hotels will negatively impact the country’s tourism sector, the Jordan Hotels Association (JHA) warned on Tuesday.
JHA Executive Director Yasar Majli said the decision will prompt hotels to raise their accommodation fees.
Finance Minister Suleiman Hafez on Tuesday recommended that the Cabinet reimpose the 16 per cent tax on room accommodation, after three years of reducing this tax to 8 per cent.
The tax reduction over the past three years, Majli said, aimed at supporting the tourism industry after it was hit as a result of regional turmoil and the global financial crisis.
“This decision will affect the sector, which is already suffering, and we will have to add the imposed raise onto the customer’s bill,” he told The Jordan Times.
Majali criticised the government, charging that it is “looking for any financial source to raise domestic revenues” to address its budget gaps.
In addition to the accommodation tax, hotels pay 11 per cent of their profits in income tax to the government.
The JHA does not have exact figures about how much the hotel sector injects into the Treasury in taxes.
According to the Jordan Tourism Board, there are 23,882 hotel rooms in Jordan, of which 6,697 rooms are in five-star hotels, 3,285 in four-star hotels, while 3,231 belong to three-star hotels.
According to the latest figures, the tourism industry’s revenues brought in JD2.456 billion in 2012, a 15.3 per cent increase from JD2.130 billion in 2011.
Despite this increase in revenues, the total number of visitors to the country fell by 7.3 per cent in 2012, to 6,314,250, compared with 6,812,426 in 2011.
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