CHTA, CTO Urge End to British APD Following PricewaterhouseCoopers Report

By: Caribbean Journal Staff - February 4, 2013

Above: a British Airways flight

By Alexander Britell

Caribbean Hotel and Tourism Association President Richard Doumeng and Caribbean Tourism Organization Chairman Beverly NIcholson-Doty are calling for an end to the British Air Passenger Duty following the release of a study finding that its abolition would significantly improve the UK’s economy.

The study by PricewaterhouseCoopers found that scrapping the APD, a banded tax on flights originating in the UK, would create almost 60,000 new jobs in the UK.

It also found that the abolishing APD would “pay for itself,” by increasing revenues from other sources such as VAT and income tax.

The next benefit, it said, even after the loss of APD revenue, would clear almost $788 million in the first year, with a 0.46 increase in GDP in the first year.

The study was commissioned by air carriers British Airways, easyJet, Ryanair and Virgin Atlantic.

The Caribbean has been calling for an end for some time to a tax it deems discriminatory in the way it taxes flights to different destinations.

“For the Caribbean, the tax is extra-territorial in effect, and is damaging the region’s tourism economy,” Doumeng and Nicholson-Doty said in a statement. “For this reason, the region has argued that, at the very least the discriminatory aspect of the tax, which favours the continental United States, should be addressed by re-banding the Caribbean to the same level as the continental US.”

The two said they hoped that the UK Chancellor “studies carefully” the report and that the Chancellor recognized that “APD is damaging the UK travel and tourism industry and by extension the vulnerable economies of the Caribbean, the most tourism dependent region in the world.”

The APD has been at the forefront of Caribbean tourism discussions of late. In late 2012, the CTO created its first-ever Airline Task Force, one of the major priorities of which was to examine the the APD.

In October, outgoing CTO Chairman and St Kitts and Nevis Tourism Minister Richard Skerritt called the APD “taxation gone crazy.”

According to CTO data, UK arrivals to the Caribbean fell by 10 percent in the first quarter of 2012, compared to just a 3 percent decline in UK holidays worldwide in the same period.

Data from the UK’s Civil Aviation Authority also found that international passenger traffic between the UK and the Caribbean fell by 10.7 percent between 2008 and 2011.

Tourism is the largest contributor to Caribbean economic growth, representing about 14.7 percent of all Caribbean GDP in 2011. Some countries derive a significantly higher percentage of their economies from tourism, including a 74.2 percent rate in Antigua).

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