Tia Belau Editorial, December 26, 2011 —-
The debate regarding the increase of the Jellyfish Lake fee have been mostly based on concerns of the intended potential benefits – the money to be raked in or its reverse side effects.
The jellyfish lake fee has jumped from $35 to increase to $100, an increase of $65 or 185%. Collection of the jellyfish lake fee is to start in June 2012.
The increased fees for both rock island and jellyfish lake are aimed at “better control of the number of visitors and to increase the quality of a visit, and to allow Koror State to generate revenues that may be used to monitor and preserve its marine resources and improve rock island tourist facilities.”
But this new policy to increase fee risk creating an even bigger problems than it hoped to gain. There is an important part of the legislative findings that is missing, which should have been considered.
John Marshall, who was the chief justice of the U.S supreme court at the turn of the 19th century, once wrote that the “power to tax, is a power to destroy.” Such might be the predicament that this state law may have created.
The role of the government is to create wealth for its people. It does that by growing the economy. And it induces growth by creating room for all sorts of industries – big and small to flourish.
State and national government, in a similar way, develop the economy by employing a combination of tax incentives and specific programs to support businesses. Taxing too much and it suffocates businesses, and less attention paid to businesses in need of support and failure to grow or die becomes a reality.
In this case, the imposition of high fees or taxes for that matter, have debilitating effects to the economy. It takes away revenues from the locals on subsistence livelihood or those who are in small cottage industries – people who are noticeably absent from most public policy considerations.
Majority of our visitors, especially from Asian markets travel on package tours. Besides the popular outing in the rock islands, they shop and visit major land based attractions – aquarium, museums, cultural and historical sites, restaurants, and gift shops. They return home with locally crafted souvenir items made by locals who depend on tourist money for better part of their living.
What is government gains then via the higher taxes becomes lost income for retailers, local restaurants, cottage industries, and individuals.
In terms of dollar amount, the only tourists data compiled for jellyfish lake so far is from January 2011. To use the month of January data, total visitors to Palau was 9,308. Of those numbers, 6,856 or 73.6% visited jellyfish lake.
If we take the 73.6% and infer from the Palau Visitors Authority projections for 2012 at 112,000 arrivals, we can look at 82,000 visitors to jellyfish lake. At new rate of $100 per head, that’s $8.2 million likely annual revenue.
However, a big chunk of that likely money is equal to lost income to those who make their living around simple tourist transactions. The $65 increase of the permit fee, is translated to estimated amount of $5.33 million extra spending money. Millions of dollars that otherwise, would have helped many small businesses expand or grow and individuals who needs it the most, instead the state government has preempted everyone.
Let us hope that there will be a re-thinking of the implication of the new fee structures and perhaps, just perhaps, the Koror State Government can begin to realize that it has as much responsibility and moral duty in directly improving the lives of its people by implementing sound public policies.
