CTO comes up with alternative two-tier APD

The Caribbean Tourism Organisation has presented the Government with an alternative banding scheme for Air Passenger Duty, claiming it would be fairer and generate more income.

It is campaigning for a two-tier system – one for Europe and one for the rest of the world.

Short-haul flights in economy would be taxed an extra £1 and in other classes slightly more to make up the shortfall.

The CTO claims its scheme better reflects the proportion of the Co2 impact from short-haul flights.

It argued that people flying shorter distances are being taxed less than those travelling further afield.

It said under the current system, travel to short-haul countries in band ‘A’ represent 45.5% of emissions but only 36% of the tax revenue.

By comparison, those countries in band ‘B’ account for 25.7% of emissions but 33% of the tax.

“This tax is discriminating against long-haul travel,” said CTO chairman Senator the Hon Ricky Skerritt, the Minister of Tourism of St Kitts-Nevis.

“It’s also hugely unfair because it penalises destinations where there is no alternative.

“If you tax flights to France from the UK, passengers can chose to reach their destination by ferry, car or rail. The Caribbean doesn’t have that luxury.

“This tax is quite simply unfair. It’s damaging thousands of people’s livelihoods in countries around the world and the British government needs to recognise this and do something immediately. We’re now urging them to consider a simple rebanding of the whole process.”

The CTO’s report has been presented to the British Treasury following a delegation of six Caribbean tourism ministers who visited London in September.

It highlights that if HMRC Jan–March 2010 figures are used as a sample, if all economy destinations from bands ‘C’ to ‘D’ were moved into band ‘B’, the lost revenue would be £11.44 million, using 1 November APD rates.

However, by increasing the APD economy rate for band ‘A’ by £1 the increased revenue for band ‘A’ economy short-haul travellers would be £14.22 million.

* What do you think of the CTO’s proposals? Do you think the scheme is fairer? Do you think it might change the Government’s mind?

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By Bev Fearis