UK freezes APD
Published:Thursday | March 24, 2011 | 12:00 AM
Trudy Simpson, UK Voice Writer
The heavily criticised airport passenger duty (APD) has been frozen until April 2012, meaning that travellers to regions such as Africa and the Caribbean will not be forced to pay even more tax on airline tickets this year.
In his second budget delivery on Wednesday, Chancellor George Osborne said another increase, due in November, would be postponed for another five months.
The move was welcomed by the travel industry, which had long denounced the tax as unfair and who had lobbied for the APD to be applied per plane rather than per passenger.
The current rises have meant that a family of four travelling to the Caribbean could fork out more than £300 in taxes alone, depending on whether they are travelling in economy or premium class.
In a plea, Jamaicas Tourism Minister Edmund Bartlett had urged the United Kingdom (UK) government to reform the APD, which it said is hurting Jamaica's tourism industry, which accounts for a third of Jamaica's foreign exchange earnings and employs one in seven workers directly and one in five indirectly.
"What needs to be made clear is that if the current system is not addressed fairly, there will be long-lasting effects on the UK, in terms of the fact that destinations such as Jamaica and the UK are inexplicably linked and, as such, not addressing the APD issue could put this relationship into irreversible jeopardy," he said, ahead of the budget.
However, Bartlett and other campaigners were left disappointed that no changes were made to another controversial APD reform that put countries in controversial bands, depending on how far their capitals are from London.
Important victory
Chairman of the Barbados-based Caribbean Tourism Organization (CTO), Richard 'Ricky' Skerrit, said in a statement that the announcement by London was "a small but important victory for the Caribbean", noting that in discussions with the British government, the CTO also opposed the idea of a 'per plane tax' for economic reasons, said a CMC report.
"We also asked that the existing banding system be reviewed for no more increases in the APD, and for it to be revised downwards in a new, fairer system. The chancellor's speech gives us positive results on all three points," said Skerritt.
"It is, therefore, clear evidence that the British government is listening to our concerns and that we have been effective in expressing them publicly and privately," he said, adding that the CTO has been officially invited to continue further APD consultation in coming weeks.
Breach international laws
The chancellor said the government is looking at the existing banding scheme but could not currently make changes. The government said it would breach international laws by calculating taxes on a per-plane basis.
The band system - which puts the Caribbean and some African countries in 'Band C' while others such as the United States are in 'Band B' meant that it was more expensive to travel to Jamaica or Barbados than it was parts of the United States such as Honolulu.
Manny Fontenla-Novoa, the chief executive officer of travel company Thomas Cook's, told Travel Weekly: "We are pleased that the chancellor has recognised the excessive burden already placed on the aviation industry by APD, and has chosen not to make any immediate increase to this tax ... We've always said that APD is fundamentally unfair as it penalises those airlines who operate with the highest load factors, so for that reason we've always supported a move to a per plane duty."