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Grenada Reacts To British APD Increase

by Mike Godfrey, Lowtax.net, New York
11 December, 2013

Grenada's minister for tourism, civil aviation and culture, Alexandra Otway-Noel, has voiced her "disappointment" at the British government's decision to hike the Air Passenger Duty (APD) for passengers flying from Britain.

George Osborne, the British Chancellor of the Exchequer, announced the APD rise as part of his Autumn Statement delivered on December 05, 2013, despite opposition from Caribbean tourism officials.

The increase in APD, which is expected to come into force on April 01, 2014, comes at a time when the Caribbean is experiencing a decline in passengers from the UK. As a result of the increase, a family of four will have to pay GBP276 (USD452) to travel by economy class from Britain to the United States, up from GBP268. However, to travel to the Caribbean the same family will have to pay GBP340, up from the current GBP332.

Otway-Noel said that the APD increase, the sixth such increase in recent years, will have serious implications for the Caribbean's tourism sector and will make it difficult for individuals in the region's diaspora to visit family and friends. "This tax is keeping families apart," she said.

The minister also argued that the banding structure of the tax is unfair, as travel to Hawaii is subject to a lower rate of APD than that to the Caribbean.

"We understand that the British government has a right to tax its citizens but all the Caribbean region is asking for is a level playing field, so that we can compete. The APD tax was originally implemented as an environmental levy and the banding structure is based on that. All we ask is that the tax be standardized," Otway-Noel said.

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