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UK, Caribbean Talks Focus On APD

by Amanda Banks, Tax-News.com, London

25 January 2012


Leaders from Caribbean nations and the United Kingdom agreed at the end of a two-day summit an action plan to establish "'a new and improved strategic partnership to promote prosperity". Importantly, the UK government committed to reopen negotiations to mitigate the impact of the UK's air travel tax on Caribbean territories.

A document was agreed at the meeting containing a 31-point action plan which was issued at the end of the two-day conference on January 22. The action plan outlines four major areas of cooperation: economic resilience, security, climate change and sustainable development, and foreign policy.

The Caribbean Community (CARICOM) said the most welcome news for the Caribbean is the agreement by the UK to re-open dialogue on issues relating to the Air Passenger Duty which is threatening the Caribbean’s tourism sector. CARICOM reported that the UK agreed that in the spirit of cooperation and in the context of the importance of tourism to the economic development of the Caribbean, it will continue talks with a view to assisting the region in mitigating any deleterious effects that the application of the tax may have on its economies.

APD was first introduced in the UK in 1994 but it was subject to punitive revisions within the government’s November 2008 pre-Budget report. The new APD system comprises four bands depending on the distance traveled, and has been criticized for being unjust, in particular by imposing higher rates on Caribbean flights compared to those to America and other equidistant destinations. From November 1, 2010, the tax is from GBP12 (USD19) to GBP24 in Europe, between GBP60 and GBP120 for intermediate destinations, between GBP75 and GBP150 for medium long haul flights, and between GBP85 and GBP170 for long haul flights.

The Foreign Ministers also agreed to develop effective coordination mechanisms to help advance the fight against drugs and international crime, and discussed the Caribbean's involvement in climate change efforts.

Prior to the ministerial forum, British Foreign Secretary William Hague said the UK delegation would be one of the most high-profile, in terms of senior official involvement, that has visited the Caribbean, as the governments looks to update its relationship with its overseas territories.

TAGS: Haiti | Suriname | tax | business | Bahamas | Montserrat | Saint Lucia | aviation | international financial centres (IFC) | Belize | Bermuda | Cayman Islands | Grenada | Jamaica | Trinidad and Tobago | Turks and Caicos Islands | United Kingdom | offshore | Anguilla | Antigua and Barbuda | Dominica | Guyana | Barbados

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