UK to Reduce APD on Caribbean Flights


Above: Parliament in the United Kingdom

By the Caribbean Journal staff

The United Kingdom has announced that it will be reforming its controversial Air Passenger Duty on flights originating in the country, Chancellor of the Exchequer George Osborne announced in his budget address.

Starting next year, all “long haul” flights will be lowered to the same rate as those headed to the United States, including flights to the Caribbean, although that overall rate will be rising from its 2013 number.

“We will also reform Air Passenger Duty to end the crazy system where you pay less tax traveling to Hawaii than you do traveling to China or India,” Osborne said. “It hits exports, puts off tourists and creates a great sense of injustice among our Caribbean and South Asian communities here in Britain.”

Duties had previously been calculated at different rates according to different “bands,” in a manner the Caribbean had alleged to be discriminatory.

For example, flights heading to Miami were charged a lower duty than those heading to the Caribbean, despite being effectively equidistant from the United Kingdom.

Next year, the new rates will mean taxes of £71 for reduced rate passengers and £142 for standard rate passengers, or a current savings of £14 per person.

Osborne also announced that the higher rates that apply to private business jets would be set at six times the reduced rate.

“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,” the Caribbean Tourism Organization said in a statement. “We want to thank everyone who has supported our lobby, including Caribbean Governments, our partners, the Caribbean Hotel & Tourism Association, British MPs and peers, the Caribbean High Commissioners in London, Caribbean Ambassadors in Brussels, the Diaspora, the World Tourism Organization (UNWTO), the World Travel and Tourism Council and the airlines and travel companies.”

The Caribbean Hotel & Tourism Association was also an active advocate for reforming the tax.

“The disparity in the Air Passenger Duty (APD) has been a critical factor leading to the decline in arrivals from the United Kingdom to the Caribbean.  With today’s announcement to a two-band system the Caribbean region will no longer be penalized,” said Jeff Vasser, the CEO of the Caribbean Hotel and Tourism Association.

Officials across the region responded favourably to the UK’s move.

In a statement issued following the decision, Jamaica Tourism Minister Dr Wykeham McNeill calling it a “major victory for the Caribbean community, which has been intensely lobbying for several years against the UK’s unfair APD band system which makes it costlier to fly to the Caribbean than to rival destinations like Hawaii in the United States, giving them a competitive advantage.”

In a release, Cayman Islands Tourism Minister Moses Kirkconnell said the decision represented a “leveling of the playing field and that this new reduced fee structure in turn should open up travel opportunities from the UK for leisure travelers.”

CARICOM Secretary General Ambassador Irwin LaRocque also chimed in, thanking the UK for its decision and saying it meant that the region’s efforts “have not been in vain,” Ambassador LaRocque said.

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