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A14 LOCAL
Wednesday 18 July 2018

Opinion column: Caribbean aviation taxes may cause

economic strangulation

petition in doubled degree.

A 2017 report of PwC
(PricewaterhouseCoopers)
commissioned by ‘Airlines
for Europe’, provided an
independent overview of
the current air passenger
taxes in Europe and an as-
sessment of their economic
impact. PwC simulated
the impact of abolishing
the tax entirely in January
2018 in Germany. Some
of the results of the study:
24.6 million additional ar-
rivals by 2020; 10.5 million
extra inbound tourist arriv-
als by 2020; 1.8 billion US$
additional expenditure by
2020. It was estimated that
the total existing passenger
taxes will raise US$ 1.2 billion
in a year, however after the
abolition of all taxes 108%
of this will be recouped in
indirect tax income any-
By Cdr. Bud Slabbaert ORANJESTAD — If an airport be an international hub, or probably well advised to way. The abolition of the air
in the Caribbean wishes to even a regional hub, it is drop departure taxes and passenger tax would boost
other passenger taxes. Pas- the country’s GDP by US$
senger taxation is ‘swamp 79 billion cumulatively over
taxation’ because no one the next 12 years.
besides the receiver wants
it, and it sucks. ICAO is the International
Civil Aviation Organiza-
“Dutch Government ditch- tion. a specialized agency
es passenger ticket tax in of the United Nations. It
efforts to halt declining codifies the principles and
traffic at Amsterdam Inter- techniques of international
national Airport, the media air navigation and fosters
reported in 2009. It was first the planning and devel-
camouflaged by the name opment of international
‘eco’-tax. The controver- air transport to ensure safe
sial departure tax ranging and orderly growth. ICAO is
from 11 to 45 Euros was distinct from other interna-
blamed for a steep decline tional air transport organi-
in passenger traffic within a zations, like the Internation-
year after its introduction. al Air Transport Association
The tax was expected to (IATA), a trade association
raise around US$ 395 mil- representing airlines.
lion a year but a commis-
sioned report concluded ICAO has clear policies
that it would cost the Dutch on taxation and Member
economy US$ 1.7 billion in States are urged to apply
lost revenue. Passengers ICAO policies on taxation in
were driving across the bor- regulatory practices. ICAO
der to neighboring airports Assembly Resolutions have
in Belgium or Germany to repeatedly urged Member
avoid the tax. States to follow the ICAO
policies on taxation and
Could that dynamic hap- not to impose taxes on the
pen in the Caribbean? sale or use of international
Sure! Passengers will opt air transport. Yet, Member
for a different island hub States have not included in
or destination that doesn’t their ASA’s (Article on Taxa-
have the taxes, but does tion) a commitment to re-
have the sun, the beaches duce or eliminate taxes on
and the palm trees, plus the the sale and use of interna-
new discovery may even tional air transport.
have more to offer. Com- Continued on Page 17