Thursday, 31 May 2012 02:30
By caribarena news
Antigua St John's - The government has presented and passed the Airport Administration Charge Act, 2012 introduced by Finance and Economy Minister Harold Lovell.
The Act provides for the direct administration of airport charges through the Antigua and Barbuda Airport Authority, replacing the Passenger Facility Charge and the Embarkation Tax, currently administered by the Commissioner of Inland Revenue and the Comptroller of Customs. The Bill was passed with minor amendments, with each of the 13 clauses adopted.
“What we’re trying to do is to give effect to the 2006 act by literally giving the authority its full intent," Lovell said. "We are moving to a position where the authority would no longer be dependent on the government to subvent. It will be earning and spending its own money and operating like other statutory corporations."
He added that the new terminal requires that adequate provisions be made to meet costs for general operations in a manner that maintains its Category 1 status without risk of downgrade.
Lovell said, “After we bring this act into effect, it is expected that the airport would be able to operate with no input from government, and be professionally staffed and managed. We are also seeking to simplify the number of taxes per airline ticket."
The moves takes Antigua’s overall airport taxes to US$93.75. Lovell said this is in keeping with St Maarten and other Caribbean islands.
The Airport Authority Act was passed in 2006 when the authority was established.
“We do not want to place ourselves in a position where we have the facility (new terminal) and we do not have the capital to service the facility,” Lovell said.
He added that the government will continue to carry some of the previous debts incurred by the Airport Authority, but the tax will make the airport experience a smoother one for both passengers and the authority.
“This is where we are. And we ask for the support of this Honorable House so that we can have a national gateway that we can pay for and upkeep,” Lovell said. “I have absolutely no doubt that what we are doing is in the best long-term interest of this country.”
Tourism and Civil Aviation Minister John Maginley seconded the motion.
St Peter Member of Parliament Asot Michael opened the debate on the subject and questioned a section of the Act that deals with exemptions. He proposed that Antiguan students studying abroad, medical professionals and patients, registered Antiguan athletes in all disciplines travelling to represent their respective clubs and country, and pensioners be added to the list of those not required to pay departure taxes.
Molwyn Jospeh, representative for St Mary’s North, said the accountant general should play a “very important role” in the administration of this and other aspects of the country’s finances. He said there is a “great risk” in this instance where situations could arise.
“I appreciate the attempt to put the airport on an independent footing. The problem is that it must be structured in a manner where the minister of finance and the accountant general have a role to play,” Joseph said.
He questioned some of the penalties for carriers who fail to pay the taxes to the authority within a specific time. Jospeh proposed that the taxes collected be turned over within 20 days of collection, and cautioned that airlines not be allowed to delay these payments.
MP Robin Yearwood sought clarification on whether the government had considered that the rise in tax would mean a rise in airfare and could reflect a decline in tourist arrivals.
“We are a tourist country. We are here to do what we have campaigned against all those months with the British Government regarding the APD. There is nothing in the Bill that makes preparation for CARICOM citizens,” Yearwood said.
However, PM Baldwin Spencer said everyone is aware of Antigua’s dependence on tourism, but one “must live and appreciate reality.”
He said, “We have a product that we will have to find ways and means of enhancing in order to continue to attract people. And therefore from time to time we have to engage in some serious capital expenditure in order to do that. The airport is a gate… we have to make it modern.
"This government is faced with an option of whether or not we are going to significantly improve the conditions at the airport and if so what mechanisms we are going to use to support those efforts. What we are asking for is not unreasonable. We are not going way beyond anything that is out there.”
The PM pointed out further that demands are constantly made of the government and it is up to provide and it is in this stride that it is pulling together various revenue streams in order to deliver proper facilities at the airport.
He grudgingly blamed the previous administration for the position that the government now finds itself with the cost it has to pay for the lands needed for the expansion of the new terminal.
Gaston Brown, ALP chairman and member of Parliament, said it has become typical for the government to introduce a tax everywhere they see a revenue shortfall and opined that the government consider it important to attempt to understand that the financial problems Antigua now faces comes from a poorly performing economy and not the tax structure.
“Taxing the people of this country out of existence is not the solution. We are a tourist destination. We are the most vulnerable tourism country perhaps on the planet. We have to be careful,” Brown said.
He added that while the need to modernize the airport is accepted, a tax increase of such gravity is incomprehensible, especially when considered against the backdrop of the potential impact on travel demand to and from Antigua.
At the risk of not being counter productive, Brown suggested the government take the bill back to the drawing board, and before returning to Parliament, it should conduct studies and consultations with the relevant stakeholders.
Tourism Minister John Maginley said he believes the bill is indeed relevant, and reiterated some of the sentiments uttered by the prime minister.
“It was done on sound financial planning” with recognized experts, Maginley said while refusing to name the consultants.