Published on : Thursday, May 19, 2016
Jamaica tourism industry may have been hit hard by the departure tax on airline tickets affecting its tourism prospects. The departure tax is being raised from US$20 to US$35 and will be effective from June 1. The government estimates that the tax will generate $5.5billons in this financial year. But this increase is sure to hit tourism hard, the tax and fees charged on the airline tickets by Jamaica are already high.
The Jamaica Hotel and Tourist Association has expressed concerns about the proposed tax increase saying it may affect Jamaica’s competitive advantage as well as future growth.
The new tax measures implemented by the government will derail lowering inflationary numbers and negatively impact tourism numbers.
According to State minister Fayval Williams, the increase in departure tax should not affect tourism numbers as the new rates are on par with that of the region.
She also added “When we look across the region and compare countries, they were at the US$25 to US$30 range, so Jamaica at US$35 is not significantly different. The increase looks big because of where it was in 2009, in terms of having the departure tax denominated in Jamaican dollars, even though at the time it was set at US$20,” she said.
“We do not believe that an additional $5 or $10 on ticket because of taxation will stop tourists from coming to Jamaica.”
The Opposition People’s National Party (PNP) spokesperson on Finance Dr Peter Phillips says Government’s imposition of an additional US$20.47 on Departure Tax has taken Jamaica above Caribbean competitors in terms of the total taxes on airline tickets.
Phillips, who was giving his budget presentation in Parliament today, said this has major negative implications for tourist arrivals.
“This move has reduced Jamaica’s competitiveness as a tourist destination. It has the distinct possibility of impairing Jamaica’s ability to attract airlift particularly from low cost carriers. This is also of concern given the normalisation of relations between Cuba and the USA and the softening of markets in Europe and Canada,” Phillips told the House.