Govt not inclined to lower travel tax - Works Minister

Govt not inclined to lower travel tax – Works Minister

Jul 12, 2013 News

Minister of Works Robeson Benn has said that for any reductions in travel voucher taxes to be made, there has to be a response from suppliers providing travel services. The Minister at a press conference, yesterday, used economic logic to conclude that where there is a high demand for travel; prices would rise if supply cannot satisfy the demand.
Responding to statements by APNU’s Joseph Harmon, who called for a reduction in the travel tax, Benn said that a reduction in ticket prices by the virtue of tax removal will only result in an increase in the demand for tickets. Ultimately, travel prices will jump again unless there is an increase in suppliers in the travel market.
The Minister said, “A few days or weeks of people getting a reduction will result in two or three weeks, another jump.
What has to happen is for us to have a response from the supply side, and that is why we are talking about LIAT, Fly Jamaica and all those other arrangements.”
Chief Executive Officer of the Cheddi Jagan International Airport, Ramesh Ghir, explained that the current price in the travel tax is not unusual. He said if one were to book a ticket at any of the travel agencies, there are several components involved in the ticket.
“For different airports there are different fees. Some say sales tax; some say departure tax, some say goods and service tax, while some say airport improvement fees or security fees.” In essence, he said, it is the same set of charges, which is associated with the cost of using the facility.
He said after checks with travel agents and airline, it was confirmed that with the exception of Jamaica, all countries charge a tax. In the case of Suriname, there is an, eight percent goods and services tax, however the facility charge is in the vicinity of $25 while a security charge is $35.
Ghir said that for Trinidad and Tobago there is a 15 percent Value Added Tax, while we in Guyana call it travel voucher tax. Barbados VAT, he said is 17.5 percent; Antigua’s VAT he said is 10 percent, but a high airport administration charge.
Ghir highlighted that the airports financial performance has increased. “In 2002, the airport would have collected $257M.” Last year, he said, it was $1.1B. Operating expenditure in 2002 was $144M. It has since grown, Ghir said and last year the airport expenditure was $553M.
Electricity charges on a monthly basis are $15Mfor the airport. This is paid by the Ministry of Finance. On a yearly basis, there are transfers to the consolidated funds; last year it was $400M and the year before, $317M, and from 2002, contributions to the fund has been between two to four hundred million dollars.
Apart from that, Ghir said there have been significant changes to the international airport over the years.
Harmon has however viewed statements by Minister Robeson Benn, about the refusal to slash the 15 percent travel tax is crucial to “upkeep” the Cheddi Jagan International Airport (CJIA) at Timehri, as mindboggling.
The tax he said goes right back to the government. Harmon said the statement from the airport authority says they have declared a profit two years in a row and it is expected that 2013 will be profitable.

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