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Caribbean Calls For APD Change In UK Budget

by Mike Godfrey, Tax-News.com, Washington

19 March 2014


The Caribbean Tourism Organization (CTO) has again voiced the Caribbean community's concerns that the United Kingdom's Air Passenger Duty (APD) is damaging the region's tourism industry ahead of the UK budget.

The statement, released ahead of British Chancellor George Osborne's March 19 budget presentation, claimed that the APD is implemented unfairly.

The duty on flights from London to the Caribbean will increase to GBP85 (USD140) per person in economy class from April 1, 2014, unless Mr Osborne announces a change, the statement says. By this point, APD on flights to the Caribbean will have increased by GBP35 (USD58), or 70 percent, since 2009. This compares with an increase of just GBP2 (USD3), or 18 percent, from London to Europe, and GBP24(USD40), or 53 percent, to the USA.

The current structure sees duty on flights from the UK to Miami, Florida, charged at lower rates than that on flights to Bridgetown, Barbados, even though they are the same distance from London. Moreover, even though Hawaii is 3,000 miles further away from London, the duty on flights there is also lower than on those to the Caribbean.

Osborne noted the anomaly in the four band structure of APD in his 2011 budget speech, when he said: "We are consulting today on how to improve the existing and rather arbitrary bands that appear to believe that the Caribbean is further away than California."

Despite discussions, and a lengthy consultation in which the Caribbean participated, no change has yet been made by the UK Government.

The CTO said that it recognizes that all governments are required to raise revenue, but believes that this should not be at the expense of the economies of regions like the Caribbean which are dependent on tourism.

British Government statistics suggest that Caribbean destinations are seeing below average arrivals from the UK. This is reflected in the Eastern Caribbean Central Bank's figures, which demonstrate that Eastern Caribbean nations continue to suffer reduced arrivals from the UK compared with other feeder markets such as the USA and Canada. In some Caribbean countries up to 40 percent of total arrivals by air are from the UK, making any reduction in visitors economically challenging.

The CTO, along with Caribbean Governments, the Caribbean Hotel and Tourism Association, diaspora groups in the UK, the World Travel and Tourism Council, and partners from the British travel industry, such as airlines and tour operators, have been campaigning against the steep increases in APD since 2009.

TAGS: tax | air passenger duty (APD) | budget | United Kingdom | Canada | Barbados | Travel | Europe

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