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Lighter Air Taxes Needed In Caribbean, Airline LIAT Says

by Mike Godfrey, Tax-News.com, Washington

07 May 2014


Caribbean Airline LIAT has called for a reduction in tax on intra-regional travel, which it says will increase tax revenue by creating more local jobs and by attracting a greater number of visitors to the Caribbean.

David Evans – previously a British Airways executive, who was appointed LIAT's CEO last month – was speaking at Destination Caribbean, a series of regional broadcasts organised by the Caribbean Tourism Organization (CTO). He said that taxes on Caribbean aviation are not significantly high in an international context, but argued that lighter taxes would bring economic and fiscal benefits as a result of a stronger tourism sector.

The event's host, the CTO, was actively involved in lobbying for changes to the UK's air passenger duty, which after several years was secured in the latest budget. Caribbean territories had complained that equidistant locations in the United States were subject to lower tax rates than in the Caribbean. Changes to make the UK's air travel tax more equitable, and Caribbean destinations therefore more competitive could be combined with lower tax rates within the region to significantly prop up local economies, said Evans. Moreover, he suggested that airlines and Governments should collaborate more deeply to boost the number of intra-regional and long-haul flights for mutual benefit.

Evans said that LIAT is a key driver of economic activity in the region, spending approximately USD12.5m in Barbados, with activities worth about USD100m for the region. He said that Governments should provide a supportive environment to aid local airlines to drive up economic growth rates and ferry more tourists to the region.

TAGS: environment | tax | aviation | budget | tax rates | Barbados

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For a region that so dependent on incoming tourism, the current taxes are too high, it is why intra-regional air travel is down almost 50% from 2006 when there were 2 carriers (LIAT and Caribbean Star).
The regional leaders need to understand the competition is Cuba, Mexco, Dominican Republic all low cost destinations and if they cannot cut taxes and costs economic stagnation for the EC regional will NOT go away. Times have changes, more globalization means people are looking globally for vacations, competition for tourists is much greater than 8 years ago.

Tomas on Thursday, May 15, 2014

 






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