Bills Provide For Doubling of Departure Tax

The Bills: the Island Enhancement Fund Amendment Bill 2011 and the St. Christopher Air and Sea Ports Amendment Bill were moved by Minister of Tourism, Richard ‘Ricky’ Skerritt and were passed into law on 3rd May, 2011 and to take effect in July of this year.

The Island Enhancement Fund Amendment Bill 2011 amends the Island Enhancement Act No. 5 of 2003 and provides for an increase in the St. Christopher and Nevis Air and Sea Ports Authority-collected US$6.5 tax on behalf of the Tourism Authority and the Solid Waste Management Cooperation (US$5.00 and US$1.5 respectively).

“So that there is no doubt at all, let me just point out that there are currently two components on the charge which total US$6.5…$1.5 for outgoing passengers and $5 for incoming passengers. The amendment seeks an increase of US$5.5 per passenger bringing the total charges of US$12. The increase is expected to generate up to about EC$1.9M annually and go towards deferring the increasing cost of marketing St. Kitts and Nevis and developing our airlift infrastructure and managing the requirements for the Solid Waste cooperation where their levy will increase from $1.5 to $3.00. This will generate an additional – we hope – 1.2 M EC$…to go towards to deferring the ever increasing cost of maintaining the environment.”

The Tourism Minister said the St. Christopher Air and Sea Ports Amendment Bill also provides for a change in the taxation regime at the Robert Llewellyn Bradshaw International Airport but also provides for all taxes to be included within the cost of one’s ticket.

He explained that currently, there are six air travel charges: Travel Tax, Passenger Facility Charge, Airport Service Charge, Security Service Charge the Island Enhancement Levy and the Environmental Levy which would be grouped into three charges: Travel Tax, Airport Charges and Development Fees, of which, only the Airport Charges and Development Fee would be increased.

In providing a overview of the total increases which would take effect as a result of the passage of both bills, Skerritt informed that the Security Service Charge would be increased from US$1.85 to US$5.33 and increase of US$3.48 and the Island Enhancement Fund Levy would increase by US$5.5 and the Environmental Levy would increase by $1.5 which registers a total increase of US$10.48.

“Some of these fees will not relate to tickets issued in St. Kitts. The total amount of be paid by tickets issued locally is about EC$100…So the fees will be going up for everybody but they will be going up more for those with tickets issued abroad than for tickets issued locally.”

Under the new legislation, according to Skerritt, SCASPA will continue to be the collection agency for these taxes. However it will be done through the International Air Transportation Association. He explained for this service, the Association would have to be paid a monthly fee which would begin at three percent during the first year and drop to two percent in the second year, tapering off to 1.65 percent during following years.

Minister Skerritt reminded that in addition to generating additional revenue, the legislation aims to decrease bottlenecks which sometimes occur at the airport, by reducing the number of cues and processes which passengers would have to endure before leaving the island.

“This is about improving the customer experience at the RLB Airport, first and foremost, but at the same time taking the opportunity to increase some fees which have not been touched for at least eight years, in some cases, more than that.”

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