Hike in departure, phone taxes

[evanovitch]

Wednesday, September 30, 2009

Finance Minister Audley Shaw last night announced an increase in the departure tax and a further hike in GCT on phone calls and instruments near the end of a marathon sitting of Parliament's Standing Finance Committee at Gordon House.

<span style="font-weight: bold">Shaw said that the airport departure tax will move from $1,000 to $1,800,</span> while <span style="font-weight: bold">the tax on phone calls and instruments -</span> which was increased from 16.5 per cent to 20 per cent in April this year - <span style="font-weight: bold">will now move to 25 per cent.</span>
The <span style="font-weight: bold">increases become effective tomorrow </span>and will yield $1.7 billion that Shaw said will close the budget deficit.

[evanovitch]

Tax muddle

Tax muddle
<span style="font-weight: bold">
Mechanism not in place for airport tariff</span>BY HG HELPS Editor-at-Large [email protected]

Friday, October 02, 2009

A day after Finance and the Public Service Minister Audley Shaw said that a new departure tax fee would become effective, the mechanism to collect the increased fees is not in place.

As officials of the Customs Department grapple to usher in stop-gap measures, Jamaica may be faced with the challenge of coming up with fresh projections to plug a gaping hole in the 2009/10 fiscal budget.

Shaw told the Jamaican Parliament early Wednesday morning that the $1.7 billion needed to fill the budget gap would come from revenue earned from increases in telephone charges and a hike in departure tax from the present $1,000 to $1,800, effective yesterday.

However, Shaw did not factor in the need to perform major surgery on an internationally related system that would take long to adjust.

The departure tax is calculated in the cost of tickets, and for an increase to be reflected, the International Air Transport Association (IATA) would have to be informed weeks in advance for the adjustment to be made electronically.

The alternative, in the short term, is for the additional $800 in the departure tax to be collected manually at Jamaica's ports of exit, something that Commissioner of Customs Danville Walker believes cannot be implemented before the start of the weekend.

&quot;There are some operational challenges that we have with the increase,&quot; Walker admitted to the Observer in an interview yesterday.

&quot;The reason is that people buy tickets all around the world and there is an association called IATA that issues tickets, so we have to get the departure tax increased through IATA and that can't happen very quickly. In the short term, we have to figure out a way to collect the difference in the tax. We will finalise that today and put in the ability to do that at our two airports.

&quot;The IATA people say they can't have that software change effected before close to the end of November, so we will have to find a way to collect the tax at the airports using the old method. We will need about two days to put in that manual system at the airports,&quot; Walker said yesterday.

Citing the possibility of loopholes and the likelihood that there may have to be some amount of flexibility when dealing with travellers, Walker said that his department was willing to accommodate passengers who were facing difficulties in certain circumstances.

But despite the confusion emanating from the Ministry of Finance, Walker is insisting that Shaw is not to blame.

&quot;Many of these things, the Ministry of Finance staff should have thought through. The minister, like myself, would not have been around to know about the mechanics of this system. Somewhere along the line, his advisors, or those persons who have been around long enough and know how these things are collected, if they had thought it through, it would have made things easier.&quot;

In the meantime, Walker is suggesting that the departure tax be pegged to the movements of the Jamaican dollar against the United States dollar.

&quot;The departure tax gets old. It has been $1,000 for a long time. It has been at $1,000 as a benchmark against US$20.
&quot;I think that we should benchmark it, simply say the departure tax is the equivalent of US$20 based on the daily Bank of Jamaica rate. Customs does that for every entry you find inside here. It comes in as CIF (Cost, Insurance and Freight), it is converted to Jamaica currency based on the Bank of Jamaica rate. If you do that, IATA is simply going to collect US$20 and always remit to the Government of Jamaica, that amount.

&quot;We will do what we have to do to correct the difference while we see what we can do to get the IATA to change,&quot; Walker said

[jaith2]

Re: Tax muddle

when i first went to jamaica, the tax was not included in the ticket &amp; was collected separate....looks like we're back to that?......bad news for peeps like me that spend every blasted cent in jamaica &amp; go home bruk...

[Nylah]

Re: Tax muddle

<span style="font-weight: bold"> Many of these things, the Ministry of Finance staff should have thought through. The minister, like myself, would not have been around to know about the mechanics of this system. Somewhere along the line, his advisors, or those persons who have been around long enough and know how these things are collected, if they had thought it through, it would have made things easier.&quot;
</span>

my man is saying this with a straight face

I'm like you jaith and if ppl dont have the phyiscal cash then what...force them to stay in JA?? hardly a hardship.
We had that issue in the Edmonton Int'l many moons ago and let's just say manual collection was a waste of effort

if it is built into the ticket price already, then that is a next thing.

[jaith2]

Re: Tax muddle

this is what drives me nutz about governments....ALL GOVERNMENTS....they decide things with no regard for the logistics. businesses that do this go out of business....THAT'S what has me worried about the US govt fixing health care

[evanovitch]

Re: Tax muddle

cho,mi tan up eena di Air Jam pawt an see a one a cawl London fi dem sen him di departure tax...as a gawd...him wanted dem fi run go di airport go pay it...mi neva know if dat was possible so mi juss pay it fi him n done...neva know di smaddy but Jah know, it did look a way fi di man deh pon longdistance a explain him plight fi dat deh likkle money..di phone cawl did cost more dan di tax...

[mountaingal]

Re: Tax muddle

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: jaith2</div><div class="ubbcode-body">this is what drives me nutz about governments....ALL GOVERNMENTS....they decide things with no regard for the logistics. businesses that do this go out of business....THAT'S what has me worried about the US govt fixing health care </div></div>

no, not all governments. some governments are more efficient than business at some things.

[Magician]

Re: Tax muddle

'Senseless' - International airline body against departure-tax increase
Published: Friday | October 2, 2009


Janet Silvera, Senior Gleaner Writer

Walker

Western Bureau:

The Government has come under fire from the International Air Transport Association (IATA), which is objecting to the unexpected increase in departure tax that became effective yesterday.

Strongly protesting the decision, the association which represents some 230 airlines worldwide, including national carrier Air Jamaica, stated in a letter to the commissioner of customs, Danville Walker, and copied to Finance Minister Audley Shaw that any fee increase for either airlines or passengers is both unwarranted and unjustified.

&quot;The international airline industry has in the past expressed its concern regarding the costs of doing business in Jamaica,&quot; said IATA's Cyriel Kronenburg.

&quot;We do not share the devaluation justification that is the basis of this increase as the collected revenue is in the same currency as the majority of the costs.&quot;

He argued that the fee increase, without any opportunity for stakeholders to review and challenge, was &quot;illogical&quot;.

No position to comply

The IATA official warned that besides the justification of the fee, international airlines would not have been in a position to comply with the fee increase by yesterday's deadline as dictated by the announcement.

&quot;The fees on the majority of airline tickets sold for travel past the October 1 implementation date have already been collected,&quot; he said. &quot;Further, three days is certainly not adequate time for airlines to change their existing systems to collect this additional fee.&quot;

Shaw announced Tuesday night that departure tax would be increased from $1,000 to $1,800.

In responding to the concerns raised by IATA, Commissioner of Customs Danville Walker told The Gleaner last night that a manual system would be put in place today through which individuals who are travelling will have to pay the difference of $800.

&quot;We have to put in place a manual system tomorrow (today) where persons who are leaving the island will pay the departure tax,&quot; he said.

Walker said the manual system would have to suffice until the computing system is installed. He added that computing system would have to be sourced from Santo Domingo in the Dominican Republic, and would take 30 days.

Long list of reasons

According to the IATA official, the hike in departure tax and other suggested increases in taxes and fees to passengers that have been floated recently would merely add to a long list of reasons passengers will choose not to fly to Jamaica and will have an adverse effect on the tourist industry.

Criticising the Government, he accused the administration of being contradictory.

&quot;The increase is in complete contradiction to what the Jamaican Government has argued with its UK counterparts, where the implementation of the Air Passenger Duty has resulted in significant decline of traffic to and from the Caribbean, which was heavily protested by Caribbean governments,&quot; he argued, adding that recently the Dutch government eliminated its passenger tax for similar reasons.

Kronenburg urged the Government to abandon the proposal to implement the fee increase and said he looked forward to the opportunity to actively engage with it and local airline associations on identifying the proper way to stimulate traffic and cover costs.

[email protected]

[Magician]

Re: Tax muddle

I guess Maas Shaw never did play SimCity growing up inna de hills of Christiana!

Raise tax Sims leave go farrin.
Raise tax, Sims from farrin don't come to visit.
Simple.

Aye sah!

[evanovitch]

Re: Tax muddle

di reason people go to Ja an been going to Ja will neva be deterre by a measly departure tax...now if all n sundry pay dem fair share in di fuss place not to mention di powers use it fi do weh dem suppose to do, we wudden be in dis position

but peeps been going to Ja an will continue going...as one group fall off anodda find wat it is dem looking fah dere....

an even wen di coral dead whe n di white sand wash whe, di weed wi still bring dem n di bamboo too

[towngyal]

Re: Tax muddle

Its always been incorportated into my ticket price...so hopefully it will still be. Im always broke when I leave now Ill have to make sure I have it just in case they collect at the airport i guess.

If you call the airline will they be able to say if its incorporated into the price you pay?

[sistacaf]

Re: Tax muddle

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Nylah</div><div class="ubbcode-body"> and if ppl dont have the phyiscal cash then what...force them to stay in JA?? </div></div>

BOAL
exactly the said thing that did happen on my first trip, this was before they smartened up and began to include it in the price of the air ticket.
this was at the time of Gilbert, and by the time came for we to leave the island we literally had not even a pence left, just straggled ourselves to the airport. The airport guy was vexed with us, but there was nothing we could do. at that time we had no <span style="font-style: italic">idea</span> there was a departure tax that we should have saved out. we just turned our (muddy) pockets out and said &quot;What-you gonna keep us here? pay MORE out the govrnment pocket just to keepus?&quot;. i know we must have at the guy too, which no doubt vexed him even more, but it was what it was. nothing we could do. he gave one loud kissteeth and told us 'oh just get on the plane and GO areddy.'

I think this same scenario playing out all day everyday back in them times, was one of the major reasons they began to collect it as part of the fees included in the air ticket. seriously, it musta happened all the time.

So towngal they may or may not be able to tell you. this is so new, the airlines may not yet be up to speed widdit.

[towngyal]

Re: Tax muddle

Im not going back until January for 6 months. Hopefully they will have it sorted out by then

[Nylah]

Re: Tax muddle



(((sistacaf)))

u have wikkid timing cause u did run on my mind just a short while ago. u have a brief email waiting for you tomorrow

[sistacaf]

Re: Tax muddle

oh cool, i look farward to that m'dear. u gave me some good wisdom to chew on, in our last rounds ((( nylah )))