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Legal battle looms between British and Caribbean governments over APD for Caribbean holidays

Trouble could be brewing between Caribbean governments and the British government over discrimination accusations and violation of existing legal agreements in regards to maintaining the level of Air Passenger Duty for Caribbean holidays.

Legal battle looms between British and Caribbean governments over APD for Caribbean holidays

Caribbean governments may be forced to take legal action against the British government on the basis of discrimination and the violation of existing legal agreements over the level of Air Passenger Duty (APD) enforced on travellers departing UK airports.

During last month’s Budget statement, the British Chancellor of the Exchequer, George Osborne, announced that the British government will be freezing Airport Passenger Duty for 12 months.

Caribbean governments were hoping that the APD would be scrapped completely but instead, Osborne stated that the freeze would apply to the current level of APD while indicating that the tax could increase even more next year.

During his speech, Osborne said that the high level of APD was having a significant effect on the spending habits of UK residents, with many UK travellers being put off booking Caribbean holidays due to the high APD costs.

The Caribbean governments’ argument is that Osborne failed to recognise the impact the high APD is having on the Caribbean tourism sector and region’s economy.

APD was first established in 1994 and since its introduction the government has increased this tax by a staggering 2,600 per cent, with passenger departing UK airports for holidays in the Caribbean paying considerably higher APD tax than tourists travelling from airports in neighbouring countries.

Lolita Applewhaite, the acting Secretary General of CARICOM, recently voiced her concerns over the UK’s APD, saying: “We view the APD as discriminatory against Caribbean destinations and Caribbean people living in the United Kingdom seeking to travel to the region.”

The British government created four bands from A to D, with A being the cheapest and D the most expensive. Caribbean countries were placed in Band C, despite holidays to the Caribbean departing from the UK being closer in distance than many of the journey to some of the countries which were categorised in Band B.

Osborne added in his statement: “In the meantime, we are consulting today on how to improve the existing and rather arbitrary bands that appear to believe that the Caribbean is further away than California.

“We hoped we could replace the per passenger tax with a per plane tax. We have tried every possible option, but have reluctantly had to accept that all are currently illegal under international law.”

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