British Air Tax Takes Effect

Britain yesterday (01 Nov) went ahead with implementing the first phase of an increase in its air passenger tax, despite cries from Caribbean countries about the impact it would have on their tourism industries.

The structure of the Air Passenger Duty (APD) has been adjusted so that destinations are now divided into four distance bands.

Although the price of the shortest flights rose by just £1 (US$1.64), the revised APD regime will place long haul destinations like those in the Caribbean in one of the highest bands, with economy class passengers facing a tax of £50 (US$73) per ticket as of November 2009, and the amount increasing to £75 (US$110) in 2010. The proposed tax for premium economy, business, and first class tickets, will be double those amounts.

In addition to Caribbean countries and tourism organisations, several British airlines as well as the Association of British Travel Agents were pushing for the government to reconsider the move, saying that it would hurt the aviation industry, the British economy and those of many developing countries, like the Caribbean, which heavily rely on tourism trade.

Last month, Parliamentary Treasury Secretary, Lord Myners told the House of Lords that consideration was being given to the effect of the APD on the Caribbean, in light of the discrepancies in how the tax is determined.

He said while the implementation of the tax was not being reconsidered, the effect of the APD on the region was not being ignored.

Lord Myners had told the House that the Exchequer Secretary to the Treasury has asked officials to continue to consider this carefully and he expected a reply before the new tax bands came into effect.

However, up to the time the new structure was implemented yesterday, there was no word on what, if any, ease would be given to Caribbean countries in this regard.


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