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Pressure To Cut Cook Islands' Departure Tax

by Mary Swire, Lowtax.net, Hong Kong
23 April, 2014

The Cook Islands Government is under pressure from the tourist industry to relax the rules on the payment of departure tax by cruise ship passengers.

It is currently the rule that tourists who stay for longer than 24 hours in the Cook Islands pay a passenger departure tax of NZD65 (USD55.70) when leaving the country. That tax is normally incorporated into the price of an airline ticket, but it has rarely been applied to cruise ship passengers as vessels have not normally stayed for that long.

However, the problem came to prominence when a large cruise ship recently cancelled an overnight stopover and left the Cook Islands hurriedly, when it became aware of the tax liability its passengers could suffer.

In an interview, Metua Vaiimene from the Cook Islands Tourism Corporation suggested that both crew and passengers should now be made exempt from the departure tax, as long as they travelling into and out of the Cook Islands on the same internationally registered cruise ship.

It is believed that an extension to 48 hours before the tax became payable would be sufficient to resolve the problem, while the stipulation that passengers coming ashore from a cruise ship and then leaving the Cook Islands by plane after more than 24 hours are subject to tax would remain.

Given that the tourism sector believes that this measure would increase and prolong cruise ship visits, the small revenue loss to the Government from the change would probably be more than offset by the economic benefits to the country, and the increased revenue from other taxes that would also ensue.

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