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Air Tax Is ‘Unfair’ On Caribbean Investors
August 10, 2009Article by Ray Withers
British property investors and tourists are being urged to sign the Air Passenger Duty petition on the Downing Street web site because of the unfairness of the new tax against visitors to many countries – especially those visiting Caribbean property.The APD is designed as a tax on green emissions and is charged on each passenger flying out from a UK airport.
The tax is calculated by working out the distance in miles from London to the capital city of the destination country, but any one with an ounce of sense can see that this disadvantages small countries.For instance, the tax on a flight to Hawaii is the same as one to New York – even though Hawaii is more than 7,000 miles from London because the APD is calculated on the distance to Washington DC.
The same applies flying east – the tax on a flight to Vladivostok, Russia, which is a 5,200 miles direct flight, is the same as going to Moscow, which is only 1550 miles.If you want to go to the Caribbean from the UK, the average flight distance is 4,000 miles, which makes it more expensive than flying to Hawaii or Vladivostok, which are both a lot further away.This also makes a flight to the Caribbean more expensive than a flight to Florida – which is relatively a few miles north of many Caribbean destinations.
Over a million visitors from the UK visited the Caribbean last year, and the Caribbean Tourism Organisation estimates that they spent about £1.4 billion. A reduction in tourist arrivals will be felt not only by tour operators, airlines and hoteliers, but also by restaurateurs, taxi drivers, farmers and other small businesses.
The APD changes were announced in the Budget 2009 and are phased in for November 2009m and November 2010.The duty will add £340 to the cost of a flight for a family of four flying to the Caribbean.
Of course, the Rolls Royce petrol rule applies – basically the rule states that if you can afford a Roller, the cost of petrol and insurance is not too much of a worry. In this case, if you have Caribbean real estate, the cost of flights is not too much of a financial burden.