NonRevs Beware: UVF Airport Tax Increase in Effect.
St. Lucia's new airport tax could hit tourism revenues and stifle economic growth, the International Monetary Fund (IMF) has said.
On April 1, 2017, the Government increased airport taxes from USD25 to USD98, installing one of the highest charges in the Caribbean. The measure is expected to boost revenues by 0.6 percent of gross domestic product.
The tax increase was aimed at offsetting a number of tax reductions announced in November 2016, including a cut to the value-added tax (VAT) rate from 15 percent to 12.5 percent effective from February 1, 2017.
But the IMF warned that the steep rise in airport taxes "is likely to have negative effects on tourism, which could overwhelm any positive impact on growth from the other measures."
"The planned increase in the airport tax should be reconsidered if its negative growth effects do materialize," the IMF said.
The IMF said that reforms in St Lucia should instead focus on broadening the tax base, reducing the numerous tax exemptions, and enhancing tax compliance.
It added that the country should also consider reducing high taxes and duties on imports to boost its competitiveness.
- See more at: St. Lucia's New Airport Tax Could Hurt Economy: IMF
British newspaper, The Telegraph, with a daily circulation of almost half a million, has picked up on the big hike in airport taxes in St. Lucia.
The article titled, ‘St Lucia wants to develop tourism – by quadrupling airport tax’ indicates that British travellers face a “sharp increase” in the cost of flights to St. Lucia due to the reintroduction of the Airport Development Tax of US$35 and the raising of the Airport Departure Tax for foreign visitors from US$25 to $63.
Citizens of Saint Lucia have expressed concern that the negative press alone – ahead of the date (June 1) when the increase comes into effect – will begin to scare off travelers and damage the already struggling tourism sector.
Britons planning a trip to Saint Lucia are facing a sharp increase in the cost of flights after the Caribbean island announced a hike in airport taxes.
The government has reintroduced an Airport Development Tax of $35 (£29) and raised the Airport Departure Tax for foreign visitors from $25 to $63 (£20 to £51), meaning the cost of flights booked from Saturday (April 1) for travel after June 1 will go up by £60 to £80. The overall cost equates to a quadrupling in the amount of tax due.
The fee, which is added to outbound airfares rather than paid locally, is aimed at raising money to support improvements to the airport and assist in developing tourism on the island.
“The new government of Saint Lucia inherited a fiscal debt and the increase in tax has been implemented to help deal with these fiscal challenges,” said Agnes Francis, chair of the Saint Lucia Tourist Board.
“We are not overly concerned [it will put off UK tourists]. These policy reform measures include a new tourism incentive to the hotel sector which will ultimately mean that the net effect to our UK travelers is zero.”
