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Last Ditch Effort to Get Britain to Reverse Controversial Tax

Minister Allen ChastanetCMC – Caribbean countries are making a last ditch effort to get the British government to reverse the air passenger duty (APD) that significantly increases the departure tax to the Caribbean. The first phase of the APD has already gone into effect and Tourism Minister Allen Chastanet told the Caribbean Media Corporation (CMC) that the regional ministers will attempt to hold discussions with British officials on the matter.

Chastanet said the mission wanted to find a way of either reducing the tax or eliminating it altogether in respect of the Caribbean.

“We are saying to them that tourism is all that we have, that you’re impacting 100 per cent of our exports. We have lost the battle over our bananas, we’ve just signed the new EPA (Economic Partnership Agreement with Europe) which included goods and services - tourism is a service," he said.

According to the new figures, a family of four travelling to the Caribbean will now pay £200 (US$327) in taxes, or £400 (US$655.65) if they are travelling in premium economy seats.

The increase is the latest in a series of price hikes since February 2007, with officials warning that the charges will rise again in November 2010.

At that time, economy passengers on the longest trips will pay £85 (US$139) – a four-fold increase in just three and a half years.

A new passenger survey has found that 80 per cent of Britons believe the system should be reformed.

In late June, Caribbean governments as well as the Barbados-based Caribbean Tourism Organization (CTO) publicly opposed plans to reform the APD, stating that it was unfair for Britain to charge a higher airport departure tax on visitors to the Caribbean compared to the tax paid by British visitors to some major destinations.

Chastanet said that the increases will have a significant impact on the tourism sector and expects that it would also have a back lash on the United Kingdom.

“But not only will it have an impact on the Caribbean, but on departures and arrivals in the UK so ultimately the greatest amount of pressure for the UK government to review its present situation is the going to be an effect on its own market.

“Several years ago the state of New York imposed a similar tax on hosting conventions and business dried up and after the tax was removed it took them three years to recover,” he added.


During the budget presentation in April, British Chancellor of the Exchequer, Alistair Darling, announced that the plans to revise the APD would proceed.  

As a result, effective this month, the airport departure tax on flights to the Caribbean has increased by between 25 per cent and 87 per cent, depending upon the class of travel.  By 2010, these taxes would increase to as high as 94 per cent.

“Our countries' economies are hugely dependent on tourism, but the British government plans use an arbitrary banding system to place us in a more expensive tax category compared to the whole of the USA,” said John Maginley, Antigua’s Minister of Tourism, who is also CTO chairman, in a letter to British Prime Minister Gordon Brown and Darling earlier this year.

 

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