est. 2007

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Oh The Irony Of It All, First It Was The United Kingdom Followed By Germany – Who Will Be Next To Introduce APD?

Minister of Tourism Richard Sealy is a member of a Caribbean delegation on a mission to the United Kingdom to convey regional concerns to the UK government about the implementation of the Airport Passenger Duty Tax (APD). The tax is estimated to significantly add to travel costs of UK’s outbound air traffic to the Caribbean. The importance of the British tourist market to Barbados is well documented. Minister of Tourism John Maginley of Antigua is also in the delegation, in a BBC interview he hinted the objective of his delegation is to give the British government first hand feedback on how the APD will impact tourism in the Caribbean. Although not hopeful they will be able to influence the British government to reverse/amend its decision in the near term, they are hopeful that the Caribbean will be included in future discussions when the opportunity presents itself to review the decision.

Most surprising has been the announcement by Germany to introduce a similar tax albeit with a lower rate regime.   Germany has and continues to be one of the strongest economies in Europe and the world currently ranked as the fifth largest. Despite the current global economic conditions Germany has been one of the few economies to have performed well. The question being asked therefore  – why would Germany implement such a measure at at this time? The tax will obviously add to the economic woes of neighbouring EU countries and beyond.

It seems if we are to understand the German financial analysts, the conservative mindset of the German government makes them oppose to deficit financing. The decision to impose taxes at this time is driven by a good economy. The moral of the story told by the German, manage the deficit when the economy is good because one doesn’t know when it will turn bad.

Germany as a member of the G8 would have participated years ago in the implementation of a system known as globalization – its basic design underpinned by trade liberalization, mobility of labour and interconnectivity of global financial systems. The irony of it all is for developing countries like Barbados to observe how a strong economy like Germany is retreating to a domestic policy which reeks of protectionism.

BU is sympathetic about the action regional governments have taken to sensitize the British government to the impact APD will have on our tourism dependent economies. It should tell us the need to restructure our economies.  Our economies are already exposed to the volatility of oil prices which experts have forecasted will not* revert to price levels of old,  we have to add tourism to the mix now that developed countries have fingered outbound air traffic as a revenue stream.

19 responses to “Oh The Irony Of It All, First It Was The United Kingdom Followed By Germany – Who Will Be Next To Introduce APD?”

  1. Crusoe Avatar
    Crusoe

    I cannot imagine what this tax is about, certainly it may keep a few who really cannot afford much, at home.

    But the wealthy who come to niche markets will still come, so it ‘could’ be a genuine money-grab.

    But, I doubt it amounts into the millions, so what is it about really?

    Is it a small tactic to show disfavour? Is it polite political pressuring, to show who is economic ‘boss’?

    Sadly, it also is directed at the ‘good Caribbean’, who has for years not only been faithful friends to these countries, but a low security threat region.

    With friends like this, who needs enemies?

    That said, please remember that we islands have such a thing as UN Votes, we have political pressure ability and we have the right of self-determination.

    Remember E.W.Barrow’s words, ‘friends of all, satellite of none’.

    Remain firm in that motto and all will be well.

    Cow-tow to no one.

    To do this we have to reject the reliance on ‘all mod cons’ and let the processed crap stay on the shelves. We have to reduce foreign consumption.

    Remember, without these tourists that come here, that may be turned back by these taxes, we have no need for certain imported goods like certain fancy fruits etc. It is the hotels who need those, no one else.

    One of the thoughts in international economics is helping those who buy from you, such that they may continue to do so.

    The tax above is the reverse. So be it. Remember too, that these same countries above are going to have a dire 2011 economically.

    Unfortunately, so shall we, so cut imports now, reduce reliance, cut foreign exchange drain.

    As for the note above ” globalization – its basic design underpinned by trade liberalization, mobility of labour and interconnectivity of global financial systems”, you neglected to metion that the basic intent, was to further the capitalist cause of the large industrialised nations, its basic result, to dampen the progress of the developing countries.

    I predict that all these trade agreements etc, will collapse, as soon as developing countries have had enough of it.

    Remember, night run till day catch it.

  2. The People's Democratic Congress Avatar
    The People’s Democratic Congress

    “BU is sympathetic about the action regional governments have taken to sensitize the British government to the impact APD will have on our tourism dependent economies. It should tell us the need to restructure our economies.” – BU in the above lead thread.

    The Minister’s trip to Britain BEGGING for a reversal of the APD, or the lowering of it, is truly indicative of the very politically weak and supine intellectual bankrupt men and women that are unashamedly loitering around the corridors of government at this stage of post-independence in this country.

    Such begging, mendicant behaviour by Mr. Sealy – and who ever else that are part of the Barbados delegation – is so humiliating, degrading and disgusting, that such behaviour itself – being the worst of its kind – makes one wonder what does it really mean to be a sovereign country in this part of the world.

    Furthermore, this DLP parliamentary representative for the constituency of St. Michael South Central – far from anybody giving him any sympathy for the situation in which the Barbados government finds itself in in relationship to the adverse sectoral-wide effects of the APD – has no moral authority whatsoever going any where to Britain to seek any changes in the APD, since he and this wretched DLP Government have been themselves continuing to impose their own brand of demonic political financial savagery – evil TAXATION – on the backs of the masses and middle classes of people of this country.

    Well, we in the PDC could only wonder: where has Mr. Sealy been when regional air passengers, many Barbadians included, esp. on LIAT have been forced to hand over such huge amounts of their incomes as part of their airfares to these joke governments within this region? Where the hell has he been??

    Yet, Sealy – a veritable imposer of TAXES – would want to tell the British what do with its APD!!!!

    Also, we in the PDC could only properly wonder too: where has he been when the present Prime Minister of Barbados introduced in 2008, and kept in 2009, such draconian levels of TAXATION on the backs of the poor people of this country, and which have thus helped to crash the so-called Barbados economy right into the ground?

    Did he NOT support those evil TAXATION measures??

    Has he ever sought to change those dastard measures??

    Has he ever sought to reverse the very terrible BDS $ 1000 liquor license charge and other dreaded TAXATION measures that have been imposed by this government on many of the incomes of those poor shopkeepers in this country – esp. those in St. Michael South Central – and whose long established businesses are on the brink of collapsing as a partial result of TAXATION? Has he ever??

    What an awful political thinker and strategist!!!

    That Mr. Sealy attempts to meddle in the afffairs of the British Government says a lot about his total ignorance of the fact that there are many innovative revolutionary ideas and policies that can be put in place to totally effectively counter such British governmental policies.

    Moreover, Mr. Sealy should have long been telling these hordes of tourism people in Barbados – who have been yearning for him to go to England – as if he is some kind of errand boy, which he is really not – to represent their case against this APD – that he has far better things to do than to do their very impertinent bidding, and that if anything what has to be done, is that the material production and distributive and financial sectors of this country have to seriously undergo a serious process of restructuring and repositioning by the entire government, private sectors and other stake holders, in order to help usher in greater levels of national growth and development in the country that are needed to see Barbados become a world class society – and not remaining a begging tottering stumbling second rate society.

    Also, what tourism planners and developers in Barbados should have been demanding of Mr. Sealy is that his government totally removes TAXATION from the political financial landscape of this country, in order that the local tourism industry and other major and minor industries would see astronomical growth and development.

    But, no, look at what they want this former Harrisonian – this engineer by profession – to be going and doing on their self-serving behalf – to be telling representatives of the British Government about the potential impact of the APD on their businesses rather than his lecturing to them on how many factories – as part of any African reparations drive or the fostering of better trade and investment between Barbados and Britain – many Barbadians should be owning/leasing at low rates in England, or how many Barbadians should be being trained freely as engineers, biochemists, physicists in the whole of Britain, as themselves part of any African reparations drive, etc.

    And, look at what stark dependency that this Minister of Tourism in this day and age has epitomized in return in this particular case!!!!

    What a shame, indeed!!

    PDC

  3. St George's Dragon Avatar
    St George’s Dragon

    The reason for the tax is simple – it’s a “green tax” intended to limit CO2 production. It’s part of the UK Government’s stated aim of shifting the burden of taxation away from conventional areas and more towards environmental taxes.
    The reason for doing it is that the UK has committed to drastic cuts in its greenhouse gas emissions and it needs to get people to change their behaviour in order to achieve these goals. Increasing taxes and therefore prices of non-environmental goods and services is part of this thrust. It’s standard economics – increased prices should reduce demand.
    The UK Government considers aircraft to be one of the worst producers of CO2 and is also concerned that other aircraft emissions at altitude are also a greenhouse problem.
    This is not, as portrayed at the Caribbean end, just another tax; it’s part of the UK’s shift towards a different and greener tax system and on the whole, the thrust of the change is supported by the UK population.
    Our best chance of dealing with this is not to try and fight it outright as we are unlikely to be able to stop the tax. We should focus on the inequitable position we find ourselves in because of the broad nature of the tax, based as it is on the distances from the UK to each country capital. This is the reason why it’s costs less in tax to fly to Hawaii, than to Barbados.
    In the medium to longer term we will have to accept that other countries will shift to green taxes as well and that as part of this they will similarly tax flights. The report about Germany doing this is just the start. Those taxes will penalise long-haul flights which will become relatively more expensive. In the future it will be easier for us to attract tourists from closer to home and that needs to be factored in to the future plan for tourism. China, for example, may not be the best place to focus on for the future because of the distance from here.
    Government says it wants to be the leading green economy in the Caribbean. We could be the first Caribbean country to take the guilt away from flying here by making the trip carbon neutral. All it would take would be for us to run some form of carbon offset system where Barbados commits to investing an amount for each visitor in carbon offsetting projects in Barbados such as the planned St Lucy wind farm. That would give us real leverage in fighting the APD. How could they impose a green tax on flights to Barbados if we were dealing with the CO2 emissions caused ourselves?

  4. David Avatar
    David

    @St. Georges Dragon

    Is there empirical evidence to support your position?

  5. Crusoe Avatar
    Crusoe

    The reason for the tax is simple – it’s a “green tax” intended to limit CO2 production’

    Good, point taken. We too must be ‘grren’ and put taxes on items that excrete carbon during production.

    That means to increase our environmental levy on goods produced overseas.

  6. Crusoe Avatar
    Crusoe

    I mean, people talking about the environment, yet dropping bombs left, right and centre in iraq and Afghanistan, producing nuclear weapons / waste.

    Is it not clear that the goal posts are put where some wish, but really mean nothing?

  7. Adrian Loveridge Avatar
    Adrian Loveridge

    Let me say first that I am fundamentally opposed to the APD. Goverments can only collect taxes in so many ways. Make a destination perceived as being too expensive and people will simply not come. NO taxes are collected on empty hotel rooms, idle rental cars, closed restaurants etc.

    Go onto Virgin’s website and the cheapest ticket for travel in November Gatwick/Barbados/Gatwick is GBP492.60 (BDS$1,507.36) of which the British Government collects GBP86.20 (BDS$263.77) in taxes which includes GBP75 APD and GBP11.20 in Passenger Service Fee.

    Book a flight Barbados/Gatwick/Barbados and the cheapest fare for the same period is GBP671.86 or BDS$2,055.90 on which the Barbados Government extracts GBP71.81 or BDS$229.80, which is made up of BDS$166.80 in VAT, BDS$55 in Passenger Service tax, BDS$5 security and BDS$3 Facility Fee.

    Therefore even if the British Government raises the APD from 1st November, they still will only be collecting GBP14.39 or BDS$44.03 more that our Government.

  8. David Avatar
    David

    @Adrian Loveridge

    Does it matter what we think?

    If the British economy is in trouble they may see this as a tax grab to boost government revenue.

    The point made by St. Georges merits watching as well.

    If he is correct it would mean the Caribbean is being fed baloney.

  9. Adrian Loveridge Avatar
    Adrian Loveridge

    I really don’t know how anyone could argue that it is a GREEN tax when it does not include freight aircraft and private jets.
    Look at FEDEX alone with its near 700 airplanes serving 375 destinations and the world’s largest airline in terms of freight tons flown.
    Imagine ALL that Carbon emission!
    To pay the same as Gatwick/Barbados and
    London/Honolulu (even if flights existed) is nonsense. LGW/BGI is 4,215 miles. London/Honolulu via LAX is over 8,000 miles.

  10. hopi Avatar
    hopi

    As if the people weren’t overly-taxed already! One of the best things the ‘educated, political’ class in Barbados can do is run all over the place and BEG. Where there are no VISIONARIES, there will be BEGGARS.

    It is simply amazing, how the ‘preyed’ can actually justify the continuous global looting of the planet by these ‘perpetual’ predators. According to the logic of some ‘dragon,’ barbados can offset this burden by simply reducing the distance between her and her ‘mother’ ……maybe we should get cow williams to pick up barbados and replant her a little closer to the UK…now that would definitely help, wouldn’t it? Or better yet why don’t we, poor little barbados, ‘take the GUILT away’ by leveraging projected wind farms to fight yet another blood-sucker tax. ‘mon dieu’

    As I type these few words, I will guarantee that these same conniving blood-suckers are at their round tables, cooking up another robbery aka TAX under the guise of protecting the environment. And again it will be justified and accepted. What is the real difference between the ‘ruling class’ blood suckers of this planet and those who just set Bridgetown ablaze killing 6 females? What is the difference? Since when did these looters give a damn about the environment? If one were to check their stock profile, one would find that they make a ‘killing’ off the ‘commodities’ that bring most harm and danger to ALL life forms on this planet.

    And now today CARBON DIOXIDE has become the ENEMY.

    Every piece of phony-baloney that the PARASICTIC CLASS has invented we have fallen for. And this carbon tax is yet another one of their scams to bleed the people, and just watch how the ignorant, self-absorbed political class in barbados continue to force it upon the people.

  11. BDs Hot Sauce Avatar
    BDs Hot Sauce

    Who needs who the most. Sadly, the Economic impact of reduced tourism no matter how minimal it may seem and even if based on standing up for the cause of “who is boss”when holding fast to the laws of supply and demand generation, will always be of significant economical detriment to any country whose main industry it is. Hence, let economics be the guide for decisions made on behalf of Barbados and not simply on being strong armed. Needless to say when it comes time to put ones foot down do so but not to the detriment of the public.

  12. Adrian Loveridge Avatar
    Adrian Loveridge

    ‘The UK Government considers aircraft to be one of the worst producers of CO2’.
    BUT only passengers carrying aircraft apparently!
    ‘World air cargo will triple’ and ‘the number of freight fleet will double over the next twenty years’
    Source: Boeing

  13. The People's Democratic Congress Avatar
    The People’s Democratic Congress

    BDs Hot sauce,

    But who is it that have mainly made Barbados so chronically dependent on tourism?

    Certainly not our party nor your business nor the average person in Barbados.

    But, some of those who years ago were the eurocentricized westernized business, bureacratic, trade union, party and governmental leaders of our country ( part of the core combination/the ideological bias in the country), in concert with certain international academic and philosophical trends that came for certain people and governments and intergovernmental organizations across certain parts of the world.

    And what about those others of the same classes of similar minds sets who came after and who continued and deepened such developmental trends within the country.

    But, one can not forget the role the late Sir Arthur Lewis played in the development of these particular trends via his ideas about so-called economic growth and development and the industrialization by invitation model.

    Fact is that Tourism development in Barbados is still part of legacy of plantation enslavement society, the core and periphery, the metropole/satellite discourse/paradigms/practices.

    PDC

  14. The People's Democratic Congress Avatar
    The People’s Democratic Congress

    Hopi,

    Very well said above – a very important contribution submitted at 8.28 am.

    PDC

  15. islandgal246 Avatar
    islandgal246

    Instead of going and begging them to remove or reduce the tax, why don’t the islands reduce some of their taxes on the tourist by a similar amount, so that the visitor feels that he or she is getting a break. GAWD can’t we stop moaning, every country has a right to tax its citizens. We cannot dictate to them how to run their country, imagine if that was the other way around? We cannot continue to live in the past and we cannot keep flogging a dead horse. Europe was an easy market and now we have our work cut out for us. Let us get up of our lazy backsides and become creative!

  16. David Avatar
    David

    @islandgal

    Your comment has merit. The jackasses who manage the respective airports in the reason will respond by saying they need the local taxes to run the airports. Why not reduce the airport tax and promote the cost savings for the traveler? Try it for 6 months and measure the lift!

    BTW BU has received reports that airport road is flooded and a part of the car park.

  17. St George's Dragon Avatar
    St George’s Dragon

    Just to pick up on the source material for my post.
    The UK Treasury paper on green taxes is here (search for Climate Change Plan):
    http://www.hm-treasury.gov.uk
    Paragraph 2.12 says:
    “the Government (will) aim to reform the tax system to shift the burden of tax from ‘goods’ (e.g. employment) to ‘bads’ (e.g. pollution).
    Paragraph 2.5 says:
    – (the Government will) pric(e) carbon through trading, tax or
    regulation – incentivising low-carbon investment
    choices in the private sector and ensuring that
    emissions reductions are delivered in the most
    cost-effective way.
    – (and) tackl(e) barriers to action, including policies to
    encourage long-term behavioural change and
    energy efficiency.
    APD is in the table on page 9. The words against it are are “restrained” but if you also read the notes against the other taxes it is clear that the Treasury is doing exactly what it has promised – raising taxes to change behavior. In our case, that means, unfortunately, trying to price people out of flying.

  18. David Avatar
    David

    @St.George’s Dragon

    Thanks for that link, it does support your point that government policy is geared to targeting transportation which is seen as adversely impacting the environment. Adrian it looks like you need to rethink your position. It begs the question why the hypocrisy by developed countries?

    Here is the link to the Climate Change Plan for those who don’t want the hassle.

  19. Johnny Postle Avatar
    Johnny Postle

    Says the spider to the fly – what web are you spinning? If you be not a web spinner then you are caught in my web and I therefore am obliged to eat you. Says the fly to the spider, I spin no web but I am a mere morsel I have other friends who have flown with me to convince you to desist from this one web. Says the spider to the fly – you come as one but your voice is many. We see you as mere food for you are no threat to us as you have no web. You are a fly and your tendency is towards pest. You respond only in crisis. You have no plan or vision; you remain divided and insular. You are weak individually and personally selfish. We have no need of you. We shall squash you like the flies you are.

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