Caribbean Cruise Head Tax Debate Rumbles On
By by Amanda Banks, Tax-News.com, London
17 December 2003

Speaking at a recent Caribbean Media Exchange (CMEX) conference in Barbados, the Tourism Minister of St Kitts & Nevis, Dwyer Astaphan, hit back at representatives of the cruise line industry who have recently voiced harsh criticism over proposals to introduce a $20 head tax per passenger visiting the region.

"This is not an assault on the cruise industry; cruise lines are our partners in the tourism industry just like the airlines are our partners," Mr Astaphan told reporters at the conference. "It is a regional effort and we need to deal with it in a mature manner and involve all stakeholders. Nobody is out to get anybody," the minister assured.

According to the proposals, the revenue raised from the head tax is to be placed in a fund which will then be spent on marketing, security and environmental projects. Some observers, such as Canadian academic Dr Ross Klein, author of ‘Cruise Ship Blues; The Underside of the Cruise Industry’ also view it as an opportunity for the cruise companies to put a share of their (what some may consider excessive) profits back into regional development.

However, the cruise industry has tended to see the issue rather differently, and one of the more vocal critics of the head tax is Micky Arison, chairman of the Florida-Caribbean Cruise Association.

In comments to the media after the official opening of the FCCA conference in October, Arison argued: "You don't promote investments by increasing taxes. You do the exact opposite. If you want to promote investment, you should decrease taxes to airlines, hotels."

Arison also pointed out that several islands have already negotiated individual head tax agreements with his organisation, and suggested that the CTO (Caribbean Tourism Organisation) had no right to "tear up" these arrangements. He revealed that the FCCA will continue to discuss new contracts as well as renegotiate old ones.

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