Insel Air’s Kluijver warns against higher taxes

POSTED: 10/21/13 11:56 AM

WILLEMSTAD – Increasing taxes will lead to job losses in the aviation industry. Albert Kluijver, CEO of Insel Air, pointed this out during the State of the Industry conference of the Caribbean Tourism Organization (CTO) in Martinique last week.

“The economic effect of growth of the airline sector is greater than the daily milking of the aviation sector,” Kluijver said according to a report in the Antilliaans Dagblad. In other words: governments would be wise to spare airlines as much as possible instead of milking the sector with higher taxes, because in doing so air traffic increases and with it related industries like tourism.

The impact of higher taxes is enormous, the Insel Air CEO said. He referred to departure tax, airport tax, passenger facility charges, landing fees, arrival tax, air traffic control fees, transfer fees and airport development charges.

Kluijver showed that taxes make up between 36 and 45 percent of the ticket price. A ticket St. Maarten-Antigua costs $351.50; this includes $125.50 in taxes (36 percent). A ticket Curacao-Aruba costs $166.25, of which $55.25 in taxes (also 36 percent). A ticket Santa Domingo-San Juan is $307.70, of which $137.70 in taxes (44.7 percent).

Kluijver took chili as an example to prove that higher travel expenses have an adverse effect on the number of visitors to a destination. The tax revenue is higher but on the other hand there is a lower contribution to the economy and more jobs are at risk. This results in a decrease of the contribution to the national treasury, Kluijver said.

It is however not all bad news in the Caribbean. St. Lucia dropped a plan to introduce a $35 airport development tax after a change of government in 2012. According to CTO-statistics the island shows the strongest growth in the 2012-2013 period.




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