The Ministry of Tourism is welcoming the United Kingdom’s reduction of the Air Passenger Duty (APD) announced yesterday in UK Chancellor of the Exchequer George Osbourne’s budget speech.
“We are very grateful this has happened. At the end of the day... every dollar the traveller saves will be spent somewhere else in the economy,” Tourism Minister Chandresh Sharma told the Express at his Port of Spain office yesterday.
From April 1, 2015, the tax paid by UK tourists coming to the Caribbean on long-haul flights between 4,001 and 6,000 miles will be reduced by £14 per person, while those over 6,000 miles will be cut by £26. Those flying in premium economy, business class or first class will save twice as much. Under the new proposal, the new Band B will be charged at the planned rate of £71 for reduced rate passengers and £142 for standard rate passengers.
Osborne, UK newspaper the Telegraph reported, said the tax “hits exports, puts off tourists and creates a great sense of injustice among our Caribbean and South Asian communities here in Britain”.
APD is currently calculated by measuring the distance between London and the final destination’s capital city, with different contributions divided into four “bands”. Band A covers flights of less than 2,000 miles, B covers those between 2,001 and 4,000 miles, C applies to those between 4,001 and 6,000, and D to those farther than 6,000 miles.
This format meant flying 4,400 miles to Port of Spain cost £300 in APD, while travelling 7000 miles to Hawaii was £240.
Come April 2015, the system will be two-tiered: Band A for short haul flights less than 2,000 miles from London, and Band B for long haul flights over 2,000 miles.
Osborne announced a change to the banding rules so all long-haul flights will now carry the same tax as a flight to the US.
Permanent secretary in the Ministry Julianna Boodram said yesterday since an increased tax had been announced in 2013, the Ministry had been very vocal in its lobby to have it reformed.
“We met with the Finance Secretary at the World Tourism Market in London and gave some good arguments. It’s been an ongoing battle. At every opportunity we have been lobbying for this tax but we were able to show that increasing the tax also meant fewer people passing though the UK, since many people who visit us pass through UK airports. They have taken all this into consideration and reduced the tax,” she said.
Barbados-based Caribbean Tourism Organisation (CTO) was also “delighted” with Osbourne’s announcement.
“This is a complete victory for the Caribbean, which, led by the CTO, has been lobbying against the unfair system which charged a higher rate of APD on flights to Barbados than Hawaii and placed the United States at a competitive advantage,” CTO chairman Beverly Nicholson-Doty said in a release yesterday.