By Caribbean News Now contributor
LONDON, England -- Britain’s Chancellor of the Exchequer, George Osborne, said on Wednesday that the controversial air passenger duty (APD) will be reformed from next year.
Britain’s Chancellor of the Exchequer, George Osborne
The chancellor announced that, from April 2015, the APD will be simplified into a two band system: Band A for short haul flights of less than 2,000 miles from London and Band B for all long haul flights more than 2,000 miles from London. The new Band B will be charged at the planned rate in 2015-16 (£71 for reduced rate passengers and £142 for standard rate passengers).
The budget document presented by Osborne stated: "To help British businesses strengthen links with high growth markets, and to go further to make the UK an attractive option for business visitors and tourists, Budget 2014 announces that the government will reform Air Passenger Duty (APD) by abolishing bands C and D from April 1, 2015."
The chancellor's rationale behind the reform is that a lower cost of flying also makes it more affordable for UK families to travel overseas.
According to the budget, from April 1, 2015, the tax on long-haul flights between 4,001 and 6,000 miles will be reduced by £14 per person, while those over 6,000 miles will be cut by £26. The move will save a family of four £56 when visiting the Caribbean. Those flying in premium economy, business class or first class will save twice as much.
The Caribbean Tourism Organization (CTO) said it is delighted with Wednesday’s announcement.
The CTO chairman, Beverly Nicholson-Doty, said: “This is a complete victory for the Caribbean, which, led by the CTO, has been lobbying against the unfair system which charged a higher rate of APD on flights to Barbados than Hawaii and placed the United States at a competitive advantage.
“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.
“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.
“Rest assured that the CTO, with support of our partners, will continue to advocate on behalf of the Caribbean tourism sector. We will now proceed to examine all the implications of this very positive development and advise our members accordingly.”
The Caribbean Hotel & Tourism Association (CHTA) also celebrated Wednesday’s announcement by Osborne.
"The Caribbean region has finally achieved one of its goals and will be fairly taxed in comparison to a flight to the United States," said Richard Doumeng, president of CHTA.
"CHTA acknowledges the individuals and organizations in the Caribbean and throughout our industry whose efforts and lobbying for tax reform for years contributed towards this triumph. Today we achieved a major victory as the playing field has been leveled," Doumeng added.
“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 Jeffrey Vasser, CHA director general and CEO of CHTA.