Caribbean anticipates decision on APD
An announcement of the future of the UK Air Passenger Duty is expected during the budget presentation next week.
BRUSSELS, Belgium, Wednesday March 16, 2011 – Caribbean tourism stakeholders say they’re anticipating a decision of the United Kingdom Parliament on the future of the Air Passenger Duty (APD) next Wednesday, and they’re hoping for a favourable outcome.
Britain's Finance Minister, George Osborne, is due to deliver a budget statement in which he’s expected to make the announcement.
“In a matter of weeks we in the Caribbean will know whether the UK Government is to amend its aviation tax policy,” Jamaica’s Minister of Tourism, Edmund Bartlett said as he addressed the Annual Caribbean Tourism Summit in Brussels.
There have been strong lobbying efforts by Caribbean governments and tourism interests to have the UK review the tax regime which the region says is discriminatory because it places the Caribbean in a higher tax band than flights to the US, even though a majority of US destinations are further away from London in distance than regional countries.
“The Caribbean would prefer to see a multilateral measure that treats all airlines and countries equally and that can be linked to development and in particular to the risk the region faces from climate change,” Bartlett noted.
The Caribbean Tourism Organisation (CTO), which is part of a regional delegation at the Summit, has put forward to the UK government a proposal for a less discriminatory approach to the computation of the tax. This alternative revenue neutral solution is more closely aligned to actual carbon emissions than to classifications based on bands.
This alternative proposal is now being considered in the UK Parliament with the expectation of a decision by the budget presentation.
“Our Governments, the industry, our community in the UK and the UK industry have joined with us to make our voice heard politically. We do not yet know whether we have been successful but I believe we have put forward a persuasive political and practical argument by suggesting an alternative revenue neutral solution that is more closely aligned with actual carbon emissions,” Minister Bartlett said.
He emphasized that regimes such as the APD essentially constitute a tax on the region’s development, given the importance of the tourism industry to the development and growth of the region.
Coupled with the APD is the European Union’s Emissions Trading Scheme (ETS) – which will include the aviation industry from next year – and the cumulative impact of these two measures is of major concern to the tourism sector in the region.
“Aviation represents the only realistic way to reach our region from Europe. Despite this there has been no consultation, no impact assessment and no sense of partnership. I note this as we are now becoming increasingly concerned about the impact of the additional burden that the inclusion of aviation in the EU Emissions Trading Scheme will have from 2012,” Minister Bartlett said.
Tourism it is the biggest employer after the public sector in the Caribbean and the largest single contributor to Gross Domestic Product. In 2010 it was worth some US$39.4 billion.
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