UPDATE: Don’t solve problems of economy on backs of poor people- Hon. Fraser
The departure tax increase was announced by Premier and Minister of Finance Dr the Honourable D. Orlando Smith during the ninth sitting of the second session of the second house of Assembly of the Virgin Islands on May 14, 2013.
As the premier concluded his presentation on the tax increase, Hon. Fraser made his disapproval known by saying, "never, never," which prompted a response from the Premier, "Ok."
Hon. Smith said Cabinet has decided to raise the passenger tax now paid by individuals travelling by sea from $5.00 to $10.00 for VI residents and fifteen dollars for non-residents. June.
According to the Minister of Finance, adaptation of the proposal would result in an equivalent rate of $20.00 that is charged for passenger Tax (Air) for non residents ($15.00 per person plus a security fee of $5.00).
He said the increase is likely to be put into effect in early June.
Noting that the Territory has been feeling the effects of stagnant revenue growth for some time now, he said the decision to increase the departure tax was one small step towards addressing this. “The increase in the Passenger Tax will also allow the Territory to capture lost revenue resulting from the demographic shift over the years of visitors that travel by sea from neighbouring St. Thomas because of insufficient air lift through Terrance B. Lettsome International Airport. Madam Speaker, this has been a trend that has developed over the years and with the proposed increase it is felt that this should not impact the decision of travelers to travel to the Territory,” Premier Smith noted.
In an exclusive interview with Virgin Islands News Online during a short break of the HOA Sitting yesterday, May 14, 2013, Hon Fraser said the Premier should have discussed the issue of passenger tax by sea before bringing the matter to the House.
"It’s inconceivable at this time given the economic state and the hardship that our people are going through for the Premier to raise the passenger departure tax, and I think what they are doing is targeting those who go to St. Thomas," said Hon. Fraser.
He said that persons go to St. Thomas to fly to the USA because the rates are extremely lower than what has to be paid from the Terrence B. Lettsome International Airport at Beef Island. "People have relatives in St. Thomas, they go there to visit their relatives, and the government should not be solving the problem of the economy on the backs of these poor people," said Hon. Fraser.
The Third District Representative added, "He said in his statement that recognizing the depressed state of the economy and the difficulty in raising capital he is going to take this step. It’s something we should have discussed before he decided to do it."
In addition, it was announced that Government will introduce an administrative system that allows individuals to purchase passes that will allow them to travel without the payment of passenger tax on each exit from the Territory. These passes will be valid for predetermined periods of time, according to Premier Smith.
Leader of the Opposition, Honourable Ralph T. O'Neal OBE also shared his opinion on raising the departure tax. "The attempt is a way to introduce a little more departure tax. I am not saying it’s not going to help but that degree is so small we cannot depend on that if we want to keep the financial services going and attracting more people," said Hon O'Neal.
Hons. Fraser’s and O’Neal’s concerns give credence to a recent finding and release done by an international body, which alludes to the Virgin Islands being one of the most expensive destinations with specific reference to Islands of Virgin Gorda and Tortola.
“Tortola, the largest of the island group, also ranked in the Top 10 as the number six most expensive Caribbean destination,” according to cheaphotel.org
It further stated, “The results are in and Virgin Gorda is the Caribbean’s most expensive destination in terms of lodging costs…Virgin Gorda earned this distinction after CheapHotels.org tabulated the findings of its latest survey. Those findings were drawn from a price comparison during the Caribbean’s high travel season, January to April 2013.”
According to cheaphotel.org the survey was conducted from January into March 2013. For each destination in the Caribbean, the price for the cheapest available double room (minimum: 3-star hotel or resort) was established for the following time periods: January 16–20, February 20–24, March 13–17 and April 3–7. An average minimum nightly rate was then calculated, resulting in the above rankings.
See previous article posted on May 14, 2013
Hike in departure tax announced
-Period of amnesty for the penalties associated with payment of Property Tax also announced
Persons departing the Territory by sea will soon be paying increased departure tax, according to Premier and Minister of Finance Dr the Honourable D. Orlando Smith.
Speaking at the ninth sitting of the second session of the second House of Assembly this morning, May 14, 2013, Hon. Smith said Cabinet has decided to raise the passenger tax now paid by individuals travelling by sea from $5.00 to $10.00 for VI residents and fifteen dollars for non residents. He said the increase is likely to be put into effect in early June.
Noting that the Territory has been feeling the effects of stagnant revenue growth for some time now, he said the decision to increase the departure tax was one small step towards addressing this. “The increase in the Passenger Tax will also allow the Territory to capture lost revenue resulting from the demographic shift over the years of visitors that travel by sea from neighbouring St. Thomas because of insufficient air lift through Terrance B. Lettsome International Airport. Madam Speaker, this has been a trend that has developed over the years and with the proposed increase it is felt that this should not impact the decision of travelers to travel to the Territory,” Premier Smith noted.
According to the Minister of Finance, adaptation of the proposal would result in an equivalent rate of $20.00 that is charged for passenger Tax (Air) for non residents ($15.00 per person plus a security fee of $5.00). In effect residents will realise a moderate increase on a tax rate that has being constant for almost 20 years.
“The BVI’s current passenger tax rate is below that of its neighbours in the region. Anguilla for example has a departure tax rate of US $20.00 per adult and $10.00 per child ages 5 to 11 leaving by sea or air for visitors while residents pay a smaller tax of US $5.00. In St. Kitts and Nevis, citizens currently pay US $18.49 and nonresidents US $21.51. They have also proposed an across the board new rate of US $37.00.”
In effect, according to Premier Smith, residents in the Virgin Islands will realise a moderate increase on a tax rate that has been constant for almost 20 years. “Madam Speaker, we are targeting the beginning of June to effect this change.”
In addition, it was announced that Government will introduce an administrative system that allows individuals to purchase passes that will allow them to travel without the payment of passenger tax on each exit from the Territory. These passes will be valid for predetermined periods of time, according to Premier Smith.
The issue of a raise in departure tax at seaports was first brought to the public attention in March 2012 by Minister for Health and Social Development Hon. Ronnie W. Skelton, who told the House of Assembly that it was time to raise the departure tax at the Territory’s seaports because most visitors were entering and departing there.
“If these people are going to assist us or help us so that they can leave money on our shores, so we could fix the seaports and airports, we have to raise the departure tax at the seaports...I know the little man who use it, it’s not the right thing because he has to come up with $20, but as a country we have to stop thinking just about ourselves but let us think about the country,” Hon. Skelton had stated.
The House was also told today about an implementation of a period of amnesty for the penalties associated with the payment of Property Tax. This is to commence on June 1, 2013 until the end of this year.
“The period of amnesty will allow taxpayers to become current with their property tax arrears, without being charged for the outstanding penalties. Madam Speaker this initiative is geared at allowing property owners to become up-to-date on their taxes, without placing the added burden of penalties on their already stretched finances.”
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50 Responses to “UPDATE: Don’t solve problems of economy on backs of poor people- Hon. Fraser”
The passport increased send a message to our business people in this country that they can legally steal from us, just as the goverment has done with their 100+ increase rate in passport price. This country cannot sustain if the salary does not increased. Do something people. You cannot continue to let the people paid for things they are not willing to enjoy now. It is stretching the pocket of the little man. Do something about this government. Increase the mininum and you can increase the tax.
The extended airport is being driven by North Sound and the megayacht people in VG. Plus, the recent legislation for aircraft-related mortgages and aircraft registration laws. Aircraft owners tend to choose jurisdictions for registration of the aircraft where mortgages can be registered. they are raising revenue with the Aircraft mortgages and aircrafts engines Act and regulations luring private jets to the BVI. But in the meantime, I live West End and the ferry to stt has always been easier for me than a $50 taxi to EIS, then $20 departure. pretty soon it will cost $100 on top of airfare to get to BVI what with ferry prices too.
If the police would start giving tickets to speeders, tailgaters, talking on phone while driving, not wearing seat belts, having a child in your lap while driving, garbage on top of your car that will end up on the road, car honking just to say hi, loud music blasting from cars above the normal frequency etc etc etc. Get the picture Mr. Premiere? I have seen these things daily and after people are ticketed the first few times, watch how fast they change. In the meantime, since people don't like change, the government will be getting richer. I wish they would implement my suggestions instead of raising the departure tax because with a family I cannot afford it.
Two million is a lot of money to bridge the gap for government.
This is the wrong move NDP & ontop of everything else shows the disconnection u have with the ppl & it will cost u in elections b/c right now only 3 of u getting back in & none of them are ministers.
Sort it out ppl, when the majority of you have some much benefits that u don't notice the prices in the stores or the impact of departure tax it's time to come out of public administration & politics.