26/09/22

INTERNATIONAL TAX: Call for ‘dynamic taxation' of Caribbean air travel.

As published on newcastleherald.com.au, Monday 26 September, 2022.

The President of the Caribbean Hotel and Tourism Association (CHTA) is recommending a tiered ‘dynamic taxation system’ as a potential solution to the high cost of air travel within and to and from the region.

Calling for a flexible approach to levying airline taxes, CHTA’s President Nicola Madden-Greig said one of the major constraints facing Caribbean travel is the heavy burden of taxation.

Understanding that the full removal of taxes may be challenging, the CHTA president suggested a tax policy that is responsive to international travel demand seasonality.

“For example, governments can affix a higher airline ticket tax in the peak winter season and lower taxes in the summer when demand is weak,” she said.

Speaking recently at IATA Caribbean Aviation Day in Grand Cayman, she said the economics of such a variable policy may in fact result in a net gain in tax revenue to Caribbean governments.

“As travel becomes more affordable and we stimulate more travel, this will result in more local spending, and consequently an increase in local tax collections,” she sai.

“I think it’s a concept that should be explored,” said Madden-Greig.

Madden-Greig hopes to explore the dynamic taxation strategy at the upcoming Caribbean Travel Forum at CHTA’s Caribbean Travel Marketplace in San Juan on October 3 to 5, 2022.