Jamaica needs money to rebuild. But is a 50% increase in the tourism GCT the smartest way to raise it?

The Government plans to increase GCT on certain tourism activities from 10% to the standard 15% rate by April 1, 2027.

Now, that’s an increase of five percentage points—but it means the actual tax charged will rise by 50%.

For example, a visitor paying US$300 per night currently pays US$30 in GCT. At the new rate, that rises to US$45.

That’s an additional US$105 on a seven-night stay—and potentially more when you add tours and other tourism services.

The Government expects the measure to raise approximately J$11.4 billion annually.

And its position is understandable.

Most Jamaican businesses already charge the standard 15% GCT. Tourism has benefited from a reduced rate, while the Government now needs billions of dollars to repair roads, bridges and other infrastructure damaged by Hurricane Melissa.

But tourism is not like every other Jamaican industry.

It is an export industry competing for the same vacation dollars as destinations such as the Dominican Republic, Mexico and The Bahamas.

And many hotel rooms that visitors will occupy next year have already been sold.

Hotels and attractions often negotiate prices with overseas tour operators 18 months to two years in advance. If those contracts are already locked in, tourism operators may not be able to simply add the higher tax to the price. They may have to absorb it.

That could mean lower profits, less money for renovations and expansion, or less room to increase wages and hire more workers.

For future bookings, businesses may pass the increase on to visitors. But that could make Jamaica more expensive at a time when travellers are comparing prices across the region.

The timing also matters.

Parts of the industry are still rebuilding after Hurricane Melissa, while businesses are dealing with high electricity costs, repairs and other operating expenses.

And this doesn’t affect only large hotels.

Tourism supports farmers, taxi operators, tour guides, attractions, restaurants, furniture makers and thousands of other small businesses.

When tourism grows, that spending spreads throughout the economy. When it slows, those businesses feel it too.

So the debate shouldn’t simply be tax versus no tax.

The real question is whether the Government can raise the revenue Jamaica needs without weakening one of the industries responsible for generating jobs, foreign exchange and tax revenue in the first place.

Because the goal shouldn’t be to collect more from tourism next year if it means the industry generates less for Jamaica in the years ahead.

And that’s The Bottom Line.

So what do you think? Should the government raise the taxes on the tourism sector?