ST JOHN’S, Antigua (CMC) – Prime Minister of Antigua and Barbuda Gaston Browne has said the coronavirus pandemic (COVID-19) has provided governments in the Caribbean with the opportunity to implement reductions in taxes on airline tickets in the region.
“The time has come for us to reduce taxes, even by 50% and I accept that you cannot determine the elasticity of pricing on travel demand, as regions and intraregions naturally remain relatively low during this period. of COVID.
“But the fact that you’re not collecting, or collecting next to nothing right now, is not income that you are giving. You can’t give what you don’t earn, ”said Browne, who intends to use the chairmanship of the regional integration movement, Caricom, next month to push the initiative forward.
He said the leaders of the Subregional Organization of Eastern Caribbean States (OECS) support the initiative as it results in other financial benefits.
“I told my OECS colleagues that the time is right. I can tell you that my colleagues are looking at it seriously and I think we should be able to convince them to do something now, ”Browne said, adding that the tax cut might be temporary.
“It could even be for a temporary period. If we say, look by the end of the year at 12 months I have no doubt, that will translate into incremental income and at the same time it will also give us an idea … perhaps the elasticity -prices of these tickets… which carry a heavy component in terms of government taxes.
“I also believe that this is one of the ways to encourage people who are fully vaccinated. We can have a bubble involving fully vaccinated people to allow them to control intra-regional movements and without any quarantine.
“There are therefore multiple advantages to introducing such a policy. So I accept that this is something that should have been done before, but I think again COVID has given us the opportunity to do it now and we shouldn’t be doing it, ”Browne said.
Many countries in the region are now reopening their borders as they emerge from the impact of the coronavirus on their respective economies. They had closed their borders in an attempt to prevent the spread of the virus that has killed and infected thousands of people in the English-speaking Caribbean region.
In May last year, the airlines trade group IATA urged Caribbean governments to lower passenger taxes if they were to profit from the post-pandemic recovery.
IATA Regional Vice President for the Americas Peter Cerda said some regional countries risked losing market share when travel resumes and some airlines are reluctant to return to certain Caribbean destinations if prices fail. are not competitive.
“One of the biggest problems we’ve always had in the Caribbean is that it’s a very heavily taxed market. And it’s always taxed on the airline side, on the passenger side, on the consumer side. And that will be a big challenge for the Caribbean once we are able to escape this crisis, ”Cerda said.