Acting Caribbean Community (CARICOM) Secretary-General, Ambassador Lolita Applewhaite has said that the aviation taxes were a burden on the Caribbean region’s development and already a decline in arrivals from the UK has been noted.
“The development of our tourism sector is beset by a number of challenges. Among these is aviation taxation, which we view as a tax on our development,” Applewhaite said in her address at the opening of the Annual Caribbean Tourism Summit in Brussels on Tuesday, according to a press release yesterday from the CARICOM Secretariat at Turkeyen.
She said air travel represents the only realistic way for tourists to reach the region from Europe – an important long-haul market for the Caribbean.
“Europe plays a vital role as a hub in growing the Caribbean tourism business.
European airports such as those in London, Frankfurt, Amsterdam, Madrid and Paris act as transit points that facilitate visitors from emerging markets such as Central Europe, China, India and Russia – all of which are new markets that we need to open,” she said.
“Such taxation has a significant negative impact on our finances, on aviation, maritime transport, on tourism and foreign relations, indeed on our entire development,” she added.
In illustrating the impact of aviation taxation on the region’s tourism industry, she referred to a report produced by the Caribbean Tourism Organisation (CTO) for the Treasury and Department of Transport of the UK, which revealed that arrivals from the UK to the Caribbean were declining.
Applewhaite said that decline was cause for concern since the UK provided as much as 38 percent of visitors to some Caribbean countries.
She said further that the CTO had presented an alternative approach to aviation taxation that suggested a change to the design of the Air Passenger Duty (APD). By simplifying the banding system and adjusting the duty levels slightly, the APD or any successor tax could be made more environmentally apt, while projecting similar levels of revenue.
Even if the issue of the UK’s APD was resolved, Applewhaite, however, cautioned that this might only be “the tip of a global fiscal iceberg that may eventually come to include all aviation and maritime transport.” Within this context, she said CARICOM was becoming increasingly concerned with the inclusion of aviation in the EU Emissions Trading Scheme (EU ETS) to be imposed from 2012.
“It is unfortunate that the EU’s decision to bring aviation into the Emissions Trading System will start a process that will see increasing levels of environmental taxation levied on aviation before any global approach is agreed.”
“The Caribbean would prefer to see a multilateral measure that does not discriminate against one mode of transportation, one that was development oriented and which took into account, the vulnerability of the region arising from climate change,” Applewhaite contended.
Lauding the CTO for its efforts in raising awareness on tourism’s importance to the regional development, she said that the industry must always be included in dialogue with Europe and other international development partners. In this context, she said CARIFORUM anticipated that the Summit would make clear how it could operationalise the provisions outlined in the Economic Partner-ship Agreement (EPA) between the Caribbean Forum of African Caribbean and Pacific States (CARIFORUM) and the European Union (EU) for intensified Caribbean-EU cooperation on tourism, including the facilitation of the transfer in technology, increased participation of small and medium-sized enterprises, and private sector financing programmes.
