SVG Departure Tax increased

The Airport Service Charge Bill got a safe passage in the House of Assembly on Tuesday, despite some strong opposition from members of the New Democratic Party (NDP).{{more}}

The passage of the Bill allows for the departure tax to increase from EC$40 to $50. The original proposed increase was $20; however, Prime Minister Dr Ralph Gonsalves said he was uneasy about increasing the tax, particularly now when there is a decrease in the number of people travelling regionally.

“I have been agonizing over whether or not I should have or have not increased the charge,” Gonsalves said.

He explained that he felt uneasy about the decision, now that there is an economic challenge affecting the region, which started internationally and that although there was an increase in stay over visitors to this country in 2011, the overall numbers for persons travelling around the region had been declining.

Gonsalves then said that he felt that the $20 increase was too much at this time and it could have a “dampening” effect on the situation.

He said that he thought a $10 increase was what the people could afford under the present circumstances, although he was confident that the increase would not have much of an effect, especially seeing that the last increase in the departure tax came into effect in 2004.

According to the prime minister, even with the $10 increase, the departure tax in St Vincent and the Grenadines would still be the lowest in the OECS.

But, in his contribution to the debate, Leader of the Opposition Arnhim Eustace said that while the Prime Minister was correct in his decision to decrease the proposed increase by $10, he should have decided against an increase altogether.

“The most productive sectors of this country are under pressure,” Eustace said, adding that he was referring specifically to agriculture and tourism.

“I believe these lead sectors are what will put us back on a good path for this economy,” he continued.

The Leader of the Opposition further contended that the cost of airline tickets was increasing, because of taxes being imposed by regional governments.

He made it unequivocally clear that he was not supporting any increase in any taxes at the moment.

“I am not supporting any increase in any taxes on the productive sectors at this time, particularly in relation to tourism and agriculture,” Eustace said.

“I don’t think it strengthens our case for those who want to increase them (taxes) from outside,” he said.

Other arguments against the increase came from all members on the opposition side present at Tuesday’s sitting of the House, including Senators Vynnette Frederick and Linton Lewis.

St Clair Leacock, area representative for Central Kingstown, Dr Godwin Friday, representative for the Northern Grenadines, Patel Matthews, representative for North Leeward and Nigel Stephenson, area representative for South Leeward, all chipped with their arguments against the proposed increase.

The Prime Minister said the new fee would be imposed 90 days after the Act has been gazetted, to facilitate the International Air Transport Agency, the agency charged with collecting the fee, which will now be included in the ticket price. (DD)