While defending the level of taxes on regional air travel, Chairman of the Caribbean Tourism Organisation (CTO), Dominic Fedee suggested that the taxes are in fact comparatively low.
Fedee, who is also St Lucia’s Minister of Tourism, is of the view that countries in the region could apply the level of taxes based on the distance of the trip, suggesting that regional governments consider moving away from a blanket approach of applying travel taxes. The St Lucia Tourism Minister made his suggestions on Wednesday, as he responded to a question during the CTO’s annual review of the region’s tourism performance.
“I can see that inter-regionally Caribbean island to island is something we need to look at because what individual countries have done is they have sort of used a broad-based approach. So even though St Lucia is 35 minutes away from Barbados, the tax that both countries have applied doesn’t match up on the distance,” said Fedee.
“The thing is that governments are going to look for ways to build and replace ailing tourism infrastructure…when compared to the rest of the world I think the taxes in the Caribbean are still quite low.”– Chairman of the Caribbean Tourism Organisation, Dominic Fedee
He conceded that in some cases, the taxes on regional travel can reach as high as 190 per cent of the base fare. In addition to a number of existing fees, Barbados implemented a new US$35 airport service charge in the form of a departure tax for those travelling within the region effective October 2018.
This tax, officials said would go towards the improvement of the island’s airport. A year prior, St Lucia also implemented a US$35 Airport Development Tax.
Fedee said overall he did not believe government taxes were too high, adding that the cost of regional travel was not the only factor limiting more residents from moving around in the Caribbean. He argued that even when oil prices would dip airlines still would not reduce their prices due to their “revenue strategy”.
Fedee also argued that the taxes on regional travel are comparable with other international destinations and insisted that they were necessary to help countries develop their tourism infrastructure.
According to the St Lucian Tourism Minister, “The thing is that governments are going to look for ways to build and replace ailing tourism infrastructure, and if tourism is their business then what you are going to see is that tourism might be susceptible to some of those taxes. When compared to the rest of the world I think the taxes in the Caribbean are still quite low.”
“Let’s not only look at airline taxes, but let’s look at room and head taxes as well. You go to some of our main cities in some of our industrialised countries you see that the tax rate is comparatively higher. So I think that we are low in comparison to a lot of places,” said Fedee.