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Caribbean aviation taxes may cause economic strangulation

SINT MAARTEN/CARIBBEAN - If an airport in the Caribbean wishes to be an international hub, or even a regional hub, it is probably well advised to drop departure taxes and other passenger taxes. Passenger taxation is ‘swamp taxation’ because no one besides the receiver wants it, and it sucks.

“Dutch Government ditches passenger ticket tax in efforts to halt declining traffic at Amsterdam International Airport, the media reported in 2009. It was first camouflaged by the name ‘eco’-tax.  The controversial departure tax ranging from 11 to 45 Euros was blamed for a steep decline in passenger traffic within a year after its introduction. 

The tax was expected to raise around US$ 395 million a year but a commissioned report concluded that it would cost the Dutch economy US$ 1.7 billion in lost revenue. Passengers were driving across the border to neighboring airports in Belgium or Germany to avoid the tax.

Could that dynamic happen in the Caribbean? Sure! Passengers will opt for a different island hub or destination that doesn’t have the taxes, but does have the sun, the beaches and the palm trees, plus the new discovery may even have more to offer. Competition in doubled degree.

A 2017 report of PwC (PricewaterhouseCoopers) commissioned by ‘Airlines for Europe’, provided an independent overview of the current air passenger taxes in Europe and an assessment of their economic impact. PwC simulated the impact of abolishing the tax entirely in January 2018 in Germany.

Some of the results of the study: 24.6 million additional arrivals by 2020; 10.5 million extra inbound tourist arrivals by 2020; 1.8 billion US$ additional expenditure by 2020. It was estimated that the total existing passenger taxes will raise US$ 1.2 billion in a year, however after the abolition of all taxes 108% of this will be recouped in indirect tax income anyway. The abolition of the air passenger tax would boost the country’s GDP by US$ 79 billion cumulatively over the next 12 years.

ICAO is the International Civil Aviation Organization. a specialized agency of the United Nations. It codifies the principles and techniques of international air navigation and fosters the planning and development of international air transport to ensure safe and orderly growth. ICAO is distinct from other international air transport organizations, like the International Air Transport Association (IATA), a trade association representing airlines.

ICAO has clear policies on taxation and Member States are urged to apply ICAO policies on taxation in regulatory practices. ICAO Assembly Resolutions have repeatedly urged Member States to follow the ICAO policies on taxation and not to impose taxes on the sale or use of international air transport. Yet, Member States have not included in their ASA’s (Article on Taxation) a commitment to reduce or eliminate taxes on the sale and use of international air transport.

Caribbean Member States of ICAO are the sovereign countries: Antigua and Barbuda, Bahamas, Barbados, Cuba, Dominican Republic, Grenada, Haiti, Jamaica, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Trinidad and Tobago.

Already, in 2013, at their Worldwide Transport Conference, the ICAO issued the following text to be included in their Template Article on Taxation (TASA) : 

“…. Each party shall undertake to reduce to the fullest practicable extent and make plans to eliminate as soon as its economic conditions permit all forms of taxation on the sale or use of international air transport, including such taxes for services which are not required for international civil aviation

or which may discriminate against it.”

According ICAO a tax is a levy that is designed to raise national or local government revenues, which are generally not applied to civil aviation in their entirety or on a cost specific basis. ICAO has also recognized that in the past decades there is a development of tourism taxes in some regions, in particular Latin America, the Caribbean and to a lesser extent in Africa, up to USD 55.

In many cases, revenues from the tourism taxes such as Tourism Enhancement Fee and Travel Promotional levies are not being reinvested in tourism development. The Caribbean may get the reputation of being one of the bad guys on the block in that regard.

The main principles on taxation contained in ICAO policies are frequently adopted by international organizations in policy documents. Some regional organizations and industry associations, such as the Airports Council International (ACI) and the International Air Transport Association (IATA), have also developed policies that are opposed to discriminatory and unfair government taxation on air transport.

The World Tourism Organization (UNWTO), while not opposed to taxes per se, as part of the overall fiscal responsibility of States, considers that travel taxes should be scrutinized objectively to avoid excessive burdens on travelers/companies with a view to reducing taxes that have a negative impact on travel and, hence, on tourism development.

Despite these policies, the past decade has seen an unprecedented proliferation of taxes levied on air passenger tickets in the region. This trend is causing serious concerns and has a negative impact on the sustainable development of air transport, which, ultimately, negatively impacts the tourism industry and the overall national economic development.

Caribbean governments are well advised that before making a decision, an independent evaluation by qualified professionals acquainted with economics should be made on the impact of passenger taxation. A ‘neat’ idea to get some extra money in the coffers, may turn out to be a monkeynomics. What plays a crucial role and contributes significantly to an economy must not hindered by ineffective government taxation. 

By Cdr. Bud Slabbaert

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Babs’ army? Call for reservists to defend NL in case of terror

SINT MAARTEN/THE NETHERLANDS – Volunteer army reservists would be used to protect important places such as Schiphol airport and Amsterdam Centraal station if there were a terror attack in the Netherlands, the defence department has said.

Following a report to this effect in the AD newspaper on Friday morning, it confirmed the plans to the NOS broadcaster.

Currently, regular and border control police work with the army if needed, but the department said that if they were needed for other work then volunteers would be asked to fill in.

‘We want to use reservists more for this because guarding and securing [places] is what they specialise in,’ Lieutenant Colonel André van Wijk told the broadcaster. By 2022, the government wants to have nine groups of 30 reservists for these kinds of tasks.

It has spaces for 6,000 volunteers, according to its website. The idea was outlined by junior defence minister Barbara Visser called for more people to sign up last month to make the defence service more flexible, while giving people valuable ‘experience’ for the corporate world. (DutchNews)

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The sun king? Dutch royal reveals he can’t have solar panels because his palace is listed

SINT MAARTEN/THE NETHERLANDS – King Willem-Alexander has revealed that he has more in common with some of his subjects than you might think: he, too, has been refused planning permission because his house is designated a monument.

RTL Nieuws reported on Thursday that the Dutch king wanted to put sun panels on his palace but this was ‘not yet’ allowed. He was, however, apparently determined to fight the good fight with the monument preservation services.

‘We will take small steps forwards,’ he added. He was talking to the green committee of a home owners’ group in Amsterdam, which also wants to put solar panels on its five houses in the Marcantilaan.

Princess Beatrix, the former queen, had mentioned the battle to make the royal home more environmentally friendly back in 2011. When visiting solar panel factory Solarwatt, she apparently said: ‘It is annoying if you don’t get permission for this kind of thing.’

There’s good news for the royals, though. Earlier this week, a climate accord between government, industry and social organisations outlined plans for far more alternative energy sources in future years to reduce greenhouse gas emissions.

And in any case, the sun was shining on Friday for the annual summer photo session for King Willem-Alexander, Queen Maxima and the princesses Catharina-Amalia, Alexia and Ariane. (DutchNews)

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Wanted: old HR teams to learn new age-neutral tricks

SINT MAARTEN/THE NETHERLANDS – Older workers are frequently discriminated against in job adverts, according to a new report from the Dutch human rights council.

It claims that 40,000 to 60,000 job adverts that it studied discriminated against older people by specifying things like wanting ‘a starter’, ‘a student’, ‘young hound’ or even ‘people from 18 to 35’.

‘Age discrimination is a problem that has a big impact on older people seeking work, and it begins with job adverts,’ it notes. The organisation looked at 1.8 million recent adverts to investigate the ways older job seekers might be excluded from even applying.

Last year, 60% of the long-term unemployed were over 45. It is, however, illegal for employers to discriminate against people because of their age, directly or indirectly. (DutchNews)

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Children with genetic spinal disease entitled to receive expensive medicine

SINT MAARTEN/THE NETHERLANDS – An expensive spinal muscular atrophy medicine for children will be covered for by Dutch health insurance from August. The NOS reported on Thursday that health minister Bruno Bruins has agreed an ‘acceptable price’ with manufacturer Biogen for the medicine, Spinraza.

It had asked for €500,000 per patient for the first half year of six injections, and then €250,000 a year for follow up treatment of three injections a year. But the National Health Care Institute ruled in January that this was too expensive, and so Bruins has agreed a new price – which has not been made public.

The drug will only be funded for children under nine and a half, since its effectiveness in older children has not been sufficiently well established. The 350 Dutch children in this situation may be able to have ‘potentially promising treatments’ under certain conditions, reports the NOS.

SMA causes muscles to weaken over time and can result in total paralysis. Spinraza stimulates the body to produce a variant of missing protein which supports nerve cells in the spinal cord that are implicated in the disease. (DutchNews)

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Electric car sales double in first six months of 2018

SINT MAARTEN/THE NETHERLANDS – Electric cars accounted for only 6% of new car sales in the Netherlands in the first six months of the year, but sales doubled in the period to €524m.

Total news car sales rose by 17% year-on-year to €8.3bn in the first half, meaning that electric car sales were increasing at a much higher rate, the Telegraaf said on Wednesday.

Electric cars all fall into the upper price bracket. A special tax on cars listed for €50,000 or more comes into force in 2019. (DutchNews)

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Dozens of driving tests abandoned because of hazardous learners

SINT MAARTEN/THE NETHERLANDS – Some 130 driving tests a month are abandoned because candidates are so poorly prepared they are a danger to other traffic.

‘Many candidates have no clue about the difference between third and fourth gear so they don’t know how to change gears,’ Nathalie Dingeldein of driving test organisation CBS told public broadcaster NOS.

The penalty for people who turn up underprepared for the test is a month’s wait for a second chance, the CBR said.

According to NOS, many candidates barely make it out of the CBS premises without committing a fatal error, having a convincing compliant driving instructor that they can take the test after only a few lessons, while others choose a driving school that is not right for them. (DutchNews)

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Public Health Inspectorate Recalls Valsartan containing drugs

SINT MAARTEN (PHILIPSBURG) - The Inspectorate of Public Health, Social Development and Labor informs the public that there is a recall for a number of blood pressure medications containing the active ingredient valsartan. Valsartan is off-patent and is used as a component of other generic medicines, the Public Health Inspectorate said in a statement on Monday.

“This recall has been issued following indications of the presence of an undesirable impurity N-nitrosodimethylamine (NDMA) in the valsartan active ingredient, which is manufactured by a facility in China.  N-nitrosodimethylamine (NDMA) is a chemical substance classified as potentially carcinogenic.

“The valsartan active ingredient from the facility in China has been used by various pharmaceutical manufacturers to produce valsartan-containing medications in Europe of which some are available on Sint Maarten.

“There is no acute health threat to patients using the affected medication containing valsartan. The chance that a patient actually develops cancer when the contaminated medication is used is small, as a first European analysis shows.

“As a precautionary measure, the valsartan containing medications are recalled on a pharmacy level. Pharmacies are therefore instructed to remove the affected medications from their stock and quarantine them.

“Patients can check whether their medication is affected by this recall by checking the (brand) name and RVG numbers on the medication box using the list added to this press release. The RVG number can be found on the medication box and at the bottom of the leaflet.

“It is vital that patients taking valsartan medication affected by this recall do not stop taking their medication abruptly and consult with their doctor or healthcare professional as soon as possible for alternative treatment.”

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TEATT Minister Johnson commends the reopening of Caribbean Cinemas

SINT MAARTEN (PHILIPSBURG) — Economic Affairs Minister Stuart Johnson has lauded the grand reopening of the Caribbean Cinemas Megaplex 7 in St. Maarten a “much needed economic activity generator for our economy.”

In a press release issued Wednesday, July 4, Minister Johnson commended the operators of Megaplex 7, on behalf of his Ministry of Tourism, Economic Affairs, Traffic & Telecommunications, TEATT, for their demonstrated commitment to reopening and supporting the local economy.

“The Movie Theatre was extensively damaged by hurricanes Irma and Maria in 2017 and left both French and Dutch St. Maarten without the coveted outlet of ‘movie nights’ with friends and family.

Minister Johnson said, “This is excellent news for a change in St. Maarten particularly as we are recovering from the devastation caused by hurricanes Irma and Maria ten months ago."

He said, “The Cinema is an example of rebuilding towards a "sustainable St. Maarten."  

He also said that it demonstrates that St. Maarten as a tourism product is once again offering other entertainment activities unique to this sub region. Johnson said, “The Cinema is not only important to our residents but also the visitors to both halves of the island as well as Anguilla and St. Barths.”

The night life in St. Maarten is further returning and that is what has always positioned St. Maarten differently from the other islands in the region.  

He said, "The reopening of the Megaplex 7 means that some of our people who lost their jobs after hurricanes can go back to work.”

Minister Johnson said it was important that the ministry of TEATT with responsibility for Economic Affairs pointed out that the confidence expressed in our economy by Caribbean Cinemas, and other businesses is “heartfelt,” as many of them could have fled after St. Maarten was devastated but they have stayed with us, and for that we are truly grateful.”

Johnson said the reopening of Megaplex 7 would have positive economic spinoffs for other businesses as more people will come out to the movies and once they leave they would want to patronize the other establishments including bars and restaurants.

Johnson said the reopening of the Movie Theatre was “encouraging and positive news” considering St. Maarten's very challenging economic period.

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