Britain announces air passenger duty tax to be reformed next year

British-Airways-400BRIDGETOWN, Barbados, Wednesday March 19, 2014, CMC – The Barbados-based Caribbean Tourism Organization (CTO) Wednesday said it was “delighted” with the announcement by the British Chancellor of the Exchequer, George Osborne, that the Air Passenger Duty (APD) would be reformed from next year.

Delivering his 2014 national budget to legislators, Osborne said hat from April of 2015, the APD will be simplified into a two band system: Band A for short haul flights of less than 2000 miles from London and Band B for all long haul flights more than 2000 miles from London.

Under the new proposal, the new Band B will be charged at the planned rate in 2015-16 of £71 (One British Pound = US$1.66 cents)for reduced rate passengers and £142 for standard rate passengers.

“This is a complete victory for the Caribbean, which, led by the CTO, has been lobbying against the unfair system which charged a higher rate of APD on flights to Barbados than Hawaii and placed the United States at a competitive advantage,” said CTO Chairman, Beverly Nicholson-Doty.

“We are delighted that the Chancellor has finally accepted the Caribbean’s proposal made in November 2010 to return to the simpler and fairer two band system” she said, thanking various stakeholders including the regional governments and diplomats based in London and Europe.

“Rest assured that the CTO, with support of our partners, will continue to advocate on behalf of the Caribbean tourism sector. We will now proceed to examine all the implications of this very positive development and advise our members accordingly,” she added.

The CTO had over the years pointed out that the APD structure  was unfair, noting that “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”.

Meanwhile, the Grenada Hotel and Tourism Association (GHTA) said that it is also delighted that London has decided to review the APD.

“We are definitely happy to see this happen; it was not easy as it involved lobbying by countries and regional institutions especially the Caribbean Hotel Association and the Caribbean Tourism Organisation. We know that this move will definitely have positive impact on the tourism sector,” it said.

International airlines have also welcomed the new measure with a spokesman for Virgin Atlantic sayin “this is a very welcome simplification to remove some of the biggest distortions of the current system, which the Chancellor himself admitted is crazy and unjust.

“The Government has rightly recognised the damage APD is having on exporters and the travelling public alike,” the spokesman added. Click here to receive free news bulletins via email from Caribbean360. (View sample)