Jamaica Gleaner
Published: Monday | October 5, 2009
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PNP raps Gov't overdeparture tax hike
The Opposition has poured scorn on attempts by Prime Minister Bruce Golding to explain the hike in departure tariff as an attempt at addressing an anomaly in the tax regime triggered by the drastic depreciation of the Jamaican dollar.

Opposition Spokesman on Tourism, Dr Wykeham McNeill, said the explanation was circuitous and urged the Government to admit that the increase was geared towards bolstering the lower-than-projected revenue intake.

Finance Minister Audley Shaw announced last week that the tax had been increased, effective October 1, from $1,000 to $1,800 as part of new revenue measures to rake in $1.7 billion.

However, Golding said last Friday the new rate would streamline departure taxation which was lagging behind because of an exchange-rate plunge in the second and third quarters of fiscal year 2008-09.

On the weekend, McNeill characterised the Government's approach as sloppy. He told The Gleaner that Golding's reasoning was disingenuous.

"It is clear that the new fee structure will do more than regularise the travel-tax regime as the prime minister claims," McNeill declared as he pointed to the Government's need to close the fiscal deficit, which has jumped by $30 billion to $95.4 billion.

According to McNeill, by pushing up the departure tax, the Golding administration had effectively derailed any efforts by Jamaica and the Caribbean to get the British government to reduce its air passenger duty, which has been forecast by industry stakeholders to hurt the travel sector.

As bad as brits

"They are complaining that increased travel taxes (in the United Kingdom) could hit tourism in the region hard while they are doing pretty much the same thing," McNeill lamented.

However, McNeill said that while any negative impact on the tourism sector would be short-lived, the Government should be wary of tinkering with a fragile sector fighting to weather the global recession storm.

McNeill was also critical of the Government's failure to consult with the travel industry before deciding on the increase.

"This has resulted in the dislocations as the systems were not informed or prepared for the increase," he said.

McNeill's criticism comes in the wake of similar sentiments expressed by the International Air Transport Association, which complained that the increase was onerous and failed to provide enough legroom for global airlines to make adjustments in time.

gary.spaulding@gleanerjm.com

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