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Tourism Chief Confident On Aviation Tax Solution

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A senior Ministry of Tourism executive yesterday expressed optimism that all parties would be “able to work” through the commercial airline concerns over new and increased taxes, and reach “a position tenable to all”.

David Johnson, director-general of tourism, told Tribune Business that the Ministry was seeking to strike a balance between this nation’s airlift and fiscal needs, and hopeful it could obtain “a clear indication” of where things were headed by week’s end.

Declining to go into specific proposals advanced by the Ministry of Tourism, Mr Johnson indicated that the talks now awaited the Government’s and, more pertinently, the Ministry of Finance’s position.

Tribune Business previously revealed how the Airlines for America (A4A) coalition, which represents the main US carriers serving the Bahamas, such as Delta, Jet Blue and American Airlines, had warned its members might cut back on services to this nation as a result of the new and increased Customs fees.

This newspaper understands that the Ministry of Tourism is leading efforts to avert any airlift loss, and Mr Johnson confirmed as much, while adding that the initiative also involved other government ministries.

Emphasising that the Ministry of Tourism “works very closely” with the airlines in a partnership approach, and understood their concerns, Mr Johnson told Tribune Business: “We feel we’ll be able to work through this.

“That’s our attitude to this, and we’re busy working on it. We’ve informed the industry we’re embracing this. We’ve shared with them our views to wok through this, and reach a position that is tenable for all.”

Acknowledging that the commercial airline industry’s position on the situation was well-known, Mr Johnson indicated the only clarification awaited was the Ministry of Finance’s views in light of the concerns raised.

“I’m hopeful we can get a clear indication by the end of the week from our side, the Government side,” he told Tribune Business. “We know we’re in a position, fortunately or unfortunately, where we have to bridge market demands and, as we have, we have to be responsible, managing this in the best interests of the Government.”

Acknowledging that the Ministry of Finance had the responsibility for managing the Government’s fiscal position, and collecting revenues/setting taxes, Mr Johnson would not be drawn on whether it should have consulted both its Tourism counterpart and airlines before implementing the increased aviation taxes.

“We’re at where we’re at, and have to move forward with all parties,” he said, adding that other countries did not consult with, or forewarn, industry before implementing new or increased taxes.

“It’s more important that we grapple with this development in a constructive way, and realising all parties have varied interests here, we want to get the optimum result for the country,” Mr Johnson said.

“It’s a work in progress. It’s just work that has to be done at a high level. We’re being constructive in our approach to this.”

The Government, in the form of Ryan Pinder, minister of financial services, had previously indicated they would not revise the new aviation tax regime. Their position is that the increases were necessary to cover Customs’ costs in providing certain services.

However, both the commercial and private aviation sectors have hit out at the increases and the way they have been implemented.

All flights are now being charged $75 for both arrival and departure, for a grand total of $150 per flight, along with increased Customs service charges for planes arriving after 5pm, and before 9am, on any given day.

Commercial aircraft with a seating capacity of less than 30 are being charged $50 per hour; airliners with seats numbering between 31-70, $100 per hour; and those with 71 seats or more, $200 per hour.

And A4A’s members also expressed concern over Customs’ new 1 per cent administrative processing fee, which will be added to brakes, tyres and other aircraft parts imported to the Bahamas for repairs. This fee, capped at $500 per import, replaces the previous $10 Stamp Duty levy.

A June 28, 2013, letter to Customs Comptroller Charles Turner from A4A warned that its members “may be forced to reconsider their service levels to the Bahamas”. It expressed particular unhappiness at the late notice provided by Customs to the airline industry of the tax /fee increases.

Keith Glatz, Airlines for America’s (A4A) vice-president of international affairs, warned Mr Turner in no uncertain terms that the new charges threatened his members’ “exceedingly slim profit margins” and could “undermine the desire to stimulate the Bahamas’ economy”.

“A4A’s members want to maintain and grow, where demand warrants, their operations to the Bahamas,” Mr Glatz told Mr Turner. “Higher taxes will not encourage A4A members to grow their service to the islands.

“With exceedingly slim profit margins and the inability to recoup the taxes and fees that they pay directly to governments, airlines may be forced to reconsider their service levels to the Bahamas.

“The proposed fees may have unintended consequences and undermine the desire to stimulate the Bahamian economy”.

Comments

banker 6 years, 10 months ago

Once again the amateur bozos that run this country made a huge mistake in trying to bring in more money to tief, and they are pushing us faster on the handcart to hell.

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concernedcitizen 6 years, 10 months ago

@Banker , bulla when 1in 4 people are paid from the public kitty you have to tax and borrow like vultures ,,if we didn,t put them on the public teet the crime wave would make what we have now look like sunday school ..Urban renewal is just away to pump chickin snack and sweet soda money into the getto to keep the guns at bay ,,albeit a change in our baby makin habits ,thats not going to happen ,the end result is Jamaica and Haiti ,,

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jackflash 6 years, 10 months ago

Now he is going to meet and explain why the government implemented the fees....

Does sound like they have any plan to rescind them, of course who do you listen too?

The PM has yet to speak to the issue..(unless I missed it)(I did hear his announcement that he is going to rush this year)

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JoesSound 6 years, 10 months ago

This just makes me scratch my head, Bahamas already has a global reputation for crime and murder making potential visitors think twice about spending their tourism dollar in the Bahamas. ANY additional taxes will be the deal breaker when considering a vacation and send people to the next closest place and that is TCI. If TCI can control crime and murder and not let it get to Bahamas levels they will win big and tourists WILL pay extra taxes to go there. There is already a reputation problem slowing tourism, now lets add a tax???? Create income for the country without raising taxes.

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concernedcitizen 6 years, 10 months ago

the big spenders , one of the rolling stones etc,,are already building in and visit TCI

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banker 6 years, 10 months ago

I see it every day in my job. I've seen a billionaire move back to Europe after 5 years in the Bahamas. It was because of the crime, the lack of cultural events (BCC censoring movies etc), the limited venues for entertainment (there are 200 restaurants alone on Seven Mile Beach in the Cayman Islands), and the biggest thing that they have against us, is the antiquated banking system. These guys are used to moving money around from stocks and bonds to various markets and commodities, and we just don't have the modern infrastructure to do it. It takes our wealth and trust people almost a week to execute an order that would take 10 minutes in Switzerland.

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JoesSound 6 years, 10 months ago

Bahamas spends ALLOT of money housing criminals, if crime was less there would be more money for government to take care of other things, more tourists, more jobs, more more more. It does not matter which political party is in control they all have the same number one problem, crime.

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concernedcitizen 6 years, 10 months ago

no we spend a tremendous amount of money making up public service jobs to absorb our prolific baby making ,,i live on a family island w/ three clinics ,each one of them has a security guard and two janitoress ,,i mean nothing goes on their but teenagers w/ babies , middle aged people w/ high blood pressure , and diabettes ,,,the staff siphon off drugs to sell when the clinics is closed ,the security guards basically sit all day watching TV in a/c ,,,

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JoesSound 6 years, 10 months ago

You made my point for me, S E C U R I T Y G U A R D.

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concernedcitizen 6 years, 10 months ago

we make more babies then the GDP can produce jobs ,thats why crime and poverty will continue to grow ,,the security guards are not needed its made up jobs to put more people on the public payroll ..Bahamasair has over 100 employees per plane the average in the non goverment owned airlines is 23 per plane ,,Bahamasair is an ego trip we don,t need ,pay Sky to handle the far flung islands it would be cheaper ,,on the other hand if we didn,t find jobs on the public teet for our undereducated lil darlins we would have a crime wave that would make today look like sunday school ,,what do you think Urban renewal is ,its a way of shoveling chicken snack money into the ghetto to keeps the guns at bay ..the reality is it can,t work forever as there is less and less people to tax and more and more babies to placate ,,then we are Haiti and Jamaica ,,the outcome of prolific baby making is inevitable

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