Aviation sector taxed as if it were 'a sin'

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February 22, 2012

The chairman of the Caribbean Tourism Organization (CTO) is calling on governments to be 'bolder" when it comes to reducing taxes on airlines.
Ricky Skerritt moderated a special strategic planning session at Routes Americas 2012 this week at Atlantis, that specifically analyzed the issue of taxation.
Glen Beache, the CEO of the St. Vincent and the Grenadines Tourism Authority, felt more work must be done to ensure the money received through taxation actually goes towards infrastructure that helps the sector.
John Kirby, the director of international for Southwest Airlines, said the airline is sometimes treated as a "sin" and taxed much like cigarettes and alcohol.
In any case, Skerritt told Guardian Business the crucial issue is for all stakeholders to consider at which point taxes become a disincentive for tourists.
""When does it become such a burden that the traveler is hurt and there is an economic impact?" he asked.  "On the tax issue we need to be bolder. We are not prepared to risk the loss of revenue up front for revenue on the back end."
The CTO chief was reluctant to point fingers, but said opinions on the issue are "mixed" among Caribbean nations.  However, excess bureaucracy, poor scheduling and expensive fares are issues that face all tourism hubs in the region, he told Guardian Business.
Last month, at least one top aviation executive blasted the government for what he considers excessive fees.  The CEO of SkyBahamas, Randy Butler, claimed fees and taxes now outpace fuel costs.
"They make it so much more expensive to travel to the Family Islands," Butler said.  "If you look at what jetBlue charges to travel to the U.S. from Nassau, for example, and how much it costs for a 12-minute trip to Andros, it can't compare.  It doesn't make sense."
On the issue of short flights in the region, Skerritt agreed that more could be done to promote travel between close neighbors.  He proposed the partial or full waivering of taxes for residents of the Caribbean if they wish to travel to other countries in the region.
"How does one get the 20 million travellers in the Caribbean to chose this region as one of their trips?" he questioned.  "We don't promote that kind of travel enough.  We do it for family reasons, such as weddings, but we want Caribbean people to be in a position to chose leisure outings in their own region."
Skerritt agreed that some governments are "getting away" with excessive taxation on airlines, although the greater offender is far across the pond.
The CTO chairman said the fight goes on to get the British government to reverse a "discriminatory" air passenger duty (APD) on all flights leaving the UK for the Caribbean.
His organization has thus far unsuccessfully lobbied to end a tax that adds hundreds to the price of a ticket.  He further claimed this tax is being used as a "cash cow" for other government debts and programs.
"It is a ridiculus level of taxation," he said.  "The Caribbean also taxes aviation and most goes to aviation for the most part.  This is an entirely different story to the British government taxing to feed their general deficit."
Routes Americas 2011 concluded yesterday.

Click here to read more at The Nassau Guardian

News date : 02/22/2012    Category : Business, Nassau Guardian Stories

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