Caribbean Tourism Organization (CTO) officials have stepped up their call on the British Government to overhaul the system used to calculate Air Passenger Duty (APD).
The CTO has presented a report to the Treasury, the Department for Transport and John Penrose, the Minister for Tourism, calling for the existing four-tier banding system to be replaced with a two-tier system.
Determined by the distance from London to the capital of the destination, the four-tier system was introduced in November last year.
The CTO said the new change would place European destinations in one bracket and all other destinations in another.
“This tax is discriminating against long-haul travel. It’s also hugely unfair because it penalizes destinations where there is no alternative [to flying],” said Senator Ricky Skerritt, chairman of the CTO and St. Kitts and Nevis’ tourism minister.
“If you tax flights to France from the U.K., passengers can choose to reach their destination by ferry, car or rail. The Caribbean doesn’t have that luxury,” he added.
The CTO said an increase of just £1 to the amount of APD paid on flights to Europe would allow for significant reductions, of up to £50, to the amount of APD paid on long-haul flights.
As short-haul flights account for around 75 per cent of all flights from Britain, these changes would mean that the total revenue collected from APD would increase, the CTO said.
It said the changes would help to halt the decline in the number of people visiting the Caribbean, encourage a greater shift to lower carbon travel, and more fairly represent the emissions generated by different flights.
Virgin Atlantic, one of Britian’s larger airlines, said flights to Band “A” destinations, such as Europe, account for 45.4 per cent of all carbon dioxide emissions but contribute just 36 per cent of total APD revenue.
Band “C” destinations, such as the Caribbean, account for 19.2 per cent of emissions but contribute 22 per cent of APD revenue, Virgin Atlantic said.
Penrose said that changes to APD were being considered to “reduce the impact on passengers’ bills”.
A spokesman for the Treasury said it welcomed the report.
“The Government will explore changes to the aviation tax system, including switching from a per-passenger to a per plane duty,” he told reporters here. “Major changes will be subject to consultation.”
The CTO’s report, which has been drawn up following negotiations with British Government ministers in September, also condemns the negative impact that changes to APD have had on Caribbean economies.
Since the introduction of the banding system in 2009, the number of British visitors to the Caribbean has fallen by 12 percent and, to some islands, by a quarter, Caribbean tourism officials said.
Adam Stewart, the chief executive of Sandals Resorts in Jamaica, has warned that the Caribbean is “dangerously dependent” on tourism.
“We’re vulnerable, yes. The global market and economies of scale mean we can’t compete at a manufacturing level,” he said.
“We’re aware that no government has surplus cash so without grants and farming subsidies for our banana industry for example, we can’t compete with the likes of Brazil”, he added.
