The Gozo Tourism Association (GTA) is proposing seasonal Value Added Tax rates for accommodation owners in Gozo, for the Government’s next upcoming Budget.

Currently, Gozo accommodation establishment owners pay 7% VAT. However GTA Chief Executive Officer Joe Muscat told this newsroom that the association is once again proposing a variable tax rate in order to mitigate seasonality. GTA is proposing that VAT should be reduced to 3% between November and March. The rate between April and October would remain the same.

Ahead of next year’s budget, the GTA is also pushing forward solutions for the ever increasing influx of vehicles and cargo on the Gozo Channel ferries; to once again focus on the extra tax added to the pool licence introduced way back in budget 2015; to commence a carrying capacity assessment study for tourism on Gozo and to pass through Parliament the amendments finalised recently on the 1999 Tourism Act.

This is not the first time the GTA has pressured the government for a change in VAT rates. In 2016, Gozitan hoteliers asked for a lower VAT rates on tourist accommodation on the island during the lean winter season. Back then the GTA CEO had said that this reduction would make Gozo more competitive. However the proposal was not undertaken by the government, hence the resubmission of such a proposal this year. 

“We are asking that in the low season, VAT is lowered, so that establishments can offer more competitive accommodation rates during the low season," Muscat told to The Malta Independent.

Meanwhile GTA is also proposing the introduction of an extra ferry, which would transport cargo back and forth between Gozo and Malta. “The demand on ferries is constant, so our proposal would mean that the three ferries being used now will only be used for cars and passengers whilst all cargo is transported by another ferry dedicated to cargo entirely.”

He explained how currently, the load factor of the ferries is not being used to the full capacity due to cargo trucks making it impossible to use both hoistable decks. "If a cargo ferry is added, this will help solve the issue,” he argued.

In 2016, the GTA had wanted a study on a fast ferry service to Valletta to be fast-tracked and a shuttle to be set up between Malta International Airport and the Ċirkewwa terminal. However this year’s proposals are not venturing into anything of the sort with the solution of an extra ferry being a necessity.

In 2015, the government introduced an extra 15 per cent tax on owners of accommodation who had pools. GTA had expressed its concern and said it would seek discussions with the government.

At the time, the Gozo Business Chamber was similarly disappointed in the increase.

Muscat said the GTA had consequently proposed that anyone who is covered by the MTA licence should not have to pay the increase, thus the measure would positively discriminate with those accommodation units that are licensed with MTA.

Furthermore, GTA is also asking the government to update the 1999 Tourism Act as amended recently. Amendments were made in February of 2016, in which licences for late night entertainment venues were reformed but also other changes were made, such as a new act regarding travel services and tourism in Malta, which regulates the constitution and operations of the Tourism Authority; a legal notice that regulates the process and conditions of all operator licenses in the sector; a list of standards and current references to the tourism police for different sectors licensed by the Tourism Authority and  two legal notices regarding travel agent obligations who organise package travel and timeshare operators. However the act has been amended on a number of occasions.

Muscat also explained the need for a carrying capacity assessment study for tourism in Gozo to include a holistic vision till 2030.