St John’s – Antigua and Barbuda has announced a 50 per cent reduction in taxes on airline tickets for travel within several countries of the Caribbean Community (CARICOM) with St John’s indicating also that the measure will last for six months in the first instance.
“We think at this time where regional travel is relatively low, extremely flat, that there is very little to lose, and even though it may not be the best condition [under] which to analyse the elasticity of ticket prices, it will give us some . . . indication as to how a reduction in pricing would impact on demand without creating a financial crisis,” Browne said.
“There is nothing to lose at this time, very little will lose as a result of cutting those taxes. So in the case of Antigua and Barbuda, we have taken a decision to cut our regional airport taxes by 50 per cent, effective Monday [June 28] and we will do so for six months to see how it impacts on revenue and then to make a final determination going forward as to what percentage is sustainable, if it is 25, 40 or even the 50 per cent,” he added.
Browne, speaking on his weekly radio programme here, said that the matter had also been discussed within the sub-regional Organisation of Eastern Caribbean States (OECS) “probably about three weeks ago.
“At our last meeting unfortunately we did not get to ventilate it, but in our prime ministerial chat group, I know the discussions were held. The [OECS] Director General [Dr Didacus Jules] is trying to get us to do a round robin to confirm the proposal or to get a formal decision on reducing the airport taxes.”
Browne said that a reduction in taxes would assist the cash-strapped regional airline, LIAT, which has been placed under court ordered administration.
“This will also help LIAT, especially if the OECS and Barbados could come together and agree on a travel bubble and to allow for fully vaccinated persons to move without quarantining. We think that will be a win-win for all of us and will also increase our airport taxes hopefully because as it stands now people aren’t travelling so we are hardly collecting any taxes and if we can incentivise the process it will be a win-win for all stakeholders.”
Last week, CARICOM leaders, who are members of the Prime Ministerial Sub-Committee on the CARICOM Single Market and Economy (CSME), met and among the agenda items was the proposal to cut taxes.
There has been no indication as to the position adopted at the meeting, but the CARICOM leaders are to meet early next month for their annual summit, where it is expected that Barbados’ Prime Minister Mia Amor Mottley, who has lead responsibility (CSME) and chaired last weekend’s deliberations, will report to her regional colleagues.
The CSME allows for the free movement of goods, skills, labour and services within the region.
Browne, during his radio programme, said as a result of the high ticket prices, LIAT for example, for every country they fly into “they have to pay a tax, you have airport taxes for the passengers.
“In the case of Antigua and Barbuda, the airport taxes is US$97 and your ticket price would include the airport tax and if you are going into Barbados, there will be another airport tax.” (CMC)
