CASTRIES,
St Lucia, Wednesday July 18, 2012 — Caribbean Community (CARICOM) chairman Dr
Kenny Anthony has written to Britain’s Chancellor of the Exchequer George
Osborne on the "deleterious effect" the controversial United Kingdom
Air Passenger Duty (APD) tax continues to wreak on Caribbean economies.
The
APD, introduced in 1994, is a British environmental tax aimed at offsetting
aviation's carbon footprint. In its initial stage, it was set at £5 (US$7.85)
per person. Since then there have been several increases.
Essentially,
the APD places countries in charging bands calculated on the distance of their
capital cities from London. As such, flying from London to Hawaii or Los
Angeles in the United States is calculated as being the same as to Washington
DC, the US capital, while Caribbean destinations are charged at a higher rate.
Regional
governments have been lobbying London to remove the tax, which they said
negatively affects the Caribbean tourism industry.
The
World Travel and Tourism Council (WTTC) has, moreover, revealed that new
research shows that removing the APD would result in an additional 91,000
British jobs being created and £4.2 billion (US$6.5 billion) added to the
British economy within a year.
In
his letter, Anthony reminded the British chancellor that Caribbean leaders have
raised the matter on several occasions, and have also discussed its negative
impact with Prime Minister David Cameron and Foreign Secretary William Hague.
"The
Caribbean understands the fiscal challenge faced by the UK in respect of
raising revenue, but we do not believe that APD should be imposed unfairly, or
at the expense of the Caribbean economy and our community in the UK,” Anthony
wrote.
"The
Caribbean is the most tourism-dependent region of the world. The industry, as
Prime Minister Cameron himself has acknowledged, is developmental and should be
contributing to growth at a time of economic difficulty.
"Our
data shows the negative effect that APD is having in this respect and hampers
our ability to obtain the greatest benefit from our most valuable export industry.
It also has a significant financial impact on the UK companies, large and
small, with which we partner and for whom the Caribbean has been a major
market," the CARICOM chairman continued, adding that "it is also
hurting our sizeable Caribbean community living in the United Kingdom".
Citing
the case of his own country, St Lucia, Prime Minister Anthony said that
"visitor arrivals from the UK declined every year for the past three
years".
Anthony
said in 2010, tourist arrivals fell 19.4 per cent below the 2008 level and in
2011 registered 14.4 per cent less compared to 2008.
"This
decline in arrivals is exacerbated by a further reduction in on-island
expenditure as the tax has had a negative impact on traveller's budget,
resulting in reduced economic benefit to the country.
"Indications
are that tourism receipts associated with these declining numbers in the last
three years have fallen on average more than 25 per cent below the 2008
level."
The
St Lucia prime minister, who recently took over the chairmanship of the
15-member regional trade bloc, told the British government minister that
regional governments "remain committed to pursuing a positive dialogue
with you and your government about alternative, revenue-neutral solutions that
could address the discriminatory aspect of the current banding system by having
the Caribbean and the USA placed in the same lower band".
He
added that he is hopeful that the issue "can still be resolved
amicably".
Earlier
this year, a number of leading international airlines, including British
Airways, EasyJet, Ryanair and Virgin Atlantic urged Osborne to suspend the
planned APD increase pending the outcome of an independent study of the
economic effects of such a tax rise.
The
airlines contended that the eight per cent increase introduced in April would
reduce passenger numbers and hinder the UK's economic recovery.
They
said that as a result of the increase, a family of four flying from the UK to
the Caribbean would have to pay close to £400 (US$625.08) in taxes. In 2005
such a family would have paid a total of £80 (US$125.06) in taxes
SOURCE:
http://www.caribbean360.com/index.php/news/st_lucia_news/596819.html#ixzz20yBS3bHN
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