Tax Agreement reached between US Virgin Islands and Airbnb

THE Government of the United States Virgin Islands and Airbnb have confirmed the first tax agreement in the #Caribbean, which will allow the platform to collect the Territory's 12.5 percent Hotel Room Occupancy Tax on behalf of hosts and remit the funds to the Virgin Islands Bureau of Internal Revenue (BIR). 

The agreement will also create a framework to help promote tourism to the U.S. Virgin Islands, highlighting the cultural and historical heritage of this world-class destination.

Airbnb has been investing in partnerships in the region to support a thriving community of homeowners who are renting their spaces and creating new flows of local economic benefits.

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New Zambian aviation charges introduced

THE Zambian Civil Aviation Authority and National Airports Corporation Ltd have announced the following aviation fees effective 1 December 2016:-

1. Passenger Safety charge (Zambian Civil Aviation Authority)
2. Navigation fees (National Airports)

The implications of these fees are as follows:-

International flights:
Payable on any tickets bought from 01/12/16 at US$ 10 per person. This will be added to the ticket by the airline and has an IATA code H2. All tickets bought prior to today are exempt.

Domestic flights:
An additional US$ 5 per person will be collected for passenger's safety charges and airport charges effective from the 1st of December 2016. This extra charge will be collected directly from guests at the airport.

Helicopter & Microlight flights:
An additional US$ 6 per person will be collected for passenger's safety charges and airport charges effective from the 1st of December 2016. This extra charge will be collected directly from guests at the helipad.

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On the runway . . .

GLOBAL flight comparison website, Cheapflights.co.uk, comments in advance of next week’s autumn statement as MPs lobby government to halve APD. The measure is being encouraged to help families by reducing the cost of flying and boost trade post Brexit. The move follows legislation earlier this year, which saw under 16s being exempted from APD.

Andrew Shelton, Managing Director of Cheapflights, said: "There is no doubt that the decision to leave the EU has impacted flight search Pre-Brexit vote. Three Eurozone countries – Spain, France and Greece – were in Cheapflights’ top-five most-searched-for destinations, ranking two, three and four respectively. Following the Brexit decision, Spain remains second on the list, but demand for the destination has dropped by 22%. France has dropped from third place to number five on the list, with searches down 28%, and Greece has fallen from number four to number seven, with demand dropping by 34%.

“If this reduction is granted, we’d expect to see a significant increase in long-haul flight searches on our website over the next month as families seek to make the most of the potential cost savings.”

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Cut ‘holiday’ tax

THE AUSTRALIAN GOVERNMENT will get more than A$1 billion (£513.9 billion) in the next financial year from its holiday tax on Australians travelling overseas to destinations and international visitors to the country.

The government currently applies an A$55 (£28.25) Passenger Movement Charge – or holiday tax – on Australian and international visitors departing the country on flights and cruise ships. It is anticipated to raise more A$1 billion in 2016-17.

The tax was introduced in 1995 to cover the cost of border and security controls at international gateways.

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Ryanair cancels Norwegian routes following airport passenger tax

RYANAIR has confirmed it will close its base in Oslo Rygge in October and reduce its traffic in #Norway by approximately 50 percent.

The move follows a decision by the government of Norway to introduce a new tax of 80 Norwegian kroner (£6.76/$9.78) to be paid by all airline passengers departing from any airport in Norway on domestic and international flights.

That 50 percent reduction in traffic translates to 900,000 fewer passengers and a loss of approximately 1,000 jobs as a result of the tax, argues Ryanair.

In Oslo, Ryanair chief commercial officer, David O’Brien said: ‘The illogical decision of the Norwegian government to introduce a flat rate, environmentally-unfriendly tax unfairly penalizes passengers on efficient, green, airlines such as Ryanair in favour of passengers on high fare, half empty, gas-guzzling airlines, and destroys the cost competitiveness of privately-owned Oslo Rygge Airport in favour of the state-owned Avinor monopoly.

‘As a result, Ryanair has no choice but to close its Oslo Rygge base which will result in our Norwegian traffic being cut in half. Since Oslo Rygge has confirmed it will be unable to sustain reduced non-based services offered by Ryanair, we will move our remaining eight Rygge routes to Oslo Torp from October.’

‘This tax will severely damage Norwegian tourism, particularly around regional airports. The Norwegian government has instantly made Norway uncompetitive and less attractive to airlines and tourists. The Italian government, which hiked passenger taxes in January, has already said it will review its decision, given the impact its tax will have on its airports.’

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Budget tax blow for self-catering sector

by Kurt Janson director of the UK Tourism Alliance 

‘HIDDEN away in the Budget’s supporting documentation was a decision that will have a detrimental impact on the tourism economy of many seaside and rural destinations: self-catering properties will be subject to the new Additional Stamp Duty Land Tax (ASDLT) on secondary residential properties being introduced on April 1.

While ASDLT is being introduced for two main reasons – to help prevent buy-to-let investors outcompeting first-time buyers in cities, and holiday home owners outcompeting locals in some coastal towns and villages – there are significant problems associated with extending it to cover self-catering properties.

The main problem is that self-catering properties constitute a large proportion of the tourism accommodation stock in many small rural and seaside destinations. They are also a preferred accommodation type for families and have seen considerable growth as a result of visitors looking for value-for-money options for holiday accommodation.

As such, they contribute significantly to the economies of these destinations. Analysis by the Tourism Alliance suggests that the average self-catering property delivers almost £35,000 per annum to the local community and that every two properties support one local job in that community.

ASDLT will have a significant impact on the viability of self-catering businesses as the additional £5,500 that will be paid on the average property represents over 40% of the £12,750 in revenue that the average property generates in its first year of operation.

We estimate that if just 10% of self-catering operators are deterred from purchasing a property as a result of ASDLT, it will lower the revenue for these small communities by £330 million per annum and cause the loss of over 6,000 jobs. It is worth noting that this £300 million loss in revenue is three times the amount the government will receive in revenue from the purchase of self-catering properties.

So, while the government’s aim of allowing more residents to buy a property in their village may be achieved, we could end up with a situation where these residents lose their job as a result.’

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Cut ‘holiday’ tax, Australian government urged

THE AUSTRALIAN GOVERNMENT will get more than A$1 billion (£513.9 billion) in the next financial year from its holiday tax on Australians travelling overseas to destinations and international visitors to the country. 

The government currently applies an A$55 (£28.25) Passenger Movement Charge – or holiday tax – on Australian and international visitors departing the country on flights and cruise ships. It is anticipated to raise more A$1 billion in 2016-17.

The tax was introduced in 1995 to cover the cost of border and security controls at international gateways.

‘The A$55 Passenger Movement Charge has now morphed into a billion dollar holiday tax on Australians and international visitors leaving the country that grossly outstrips the A$247 million cost of processing passengers at the border,’ said Margy Osmond, CEO of the Tourism & Transport Forum Australia. ‘With more than 9.4 million Australians travelling overseas in the past year, the holiday tax has become a cash grab that goes straight into the federal government’s coffers. If you purchase a A$300 one way ticket from Sydney to Bali, $55 of that is now going to the federal government through its holiday tax. A lot of travellers would be questioning what they are getting for their hard earned money.

‘To make matters worse, we are also slugging the 7.4 million international visitors who are choosing #Australia to visit, who can easily chose another destination anywhere in the world, with this holiday tax. We should be growing our international visitations by cutting the cost of travel, not increasing it. We had more than one million Chinese visitors spending A$7.7 billion in the past 12 months – that is not something we should be jeopardizing with holiday taxes.’

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Malta’s 50c tourist eco-tax expected to raise €6 million a year

MALTA’S tourism minister Edward Zammit Lewis says the 50c (38p) per night tourist eco-tax, which will come into effect in April, is expected to generate approximately €6 million (£4.65 million) annually.

He said the tax will be capped at €5 (£3.88), and that the income would be used for a public-private partnership scheme which will include the #Malta Hotels and Restaurants Association and the government.

It will also be used to refurbish and maintain public spaces in tourist areas.

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UK to review VAT savings at airport shops

UK CHANCELLOR George Osborne has confirmed that the government will launch a review into airport sales to make sure Value Added Tax (VAT) savings are being passed on to shoppers.

Some airside retailers currently are keeping up to an estimated 50p of every £1 of potential VAT savings instead of passing those savings on to shoppers, says Mr Osborne. The government’s Revenue and Customs department has been asked to review airside VAT-free shopping to make sure that shoppers share more of the benefit in future.

The review is expected to be completed by early 2016 and will also cover all other airside shopping taxes.

Osborne said: ‘For families flying out of the UK for a winter get-away, airports should be the ideal place to pick-up a bargain. VAT relief at airports is intended to cut prices for those travellers, not be a windfall gain for shops. But many people could be paying over the odds for their purchases because the government’s VAT concession isn’t passed on. This is simply unacceptable.

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Tourist ‘tax’ for Malta hotel guests

GUESTS at hotels in Malta and Gozo will have to pay what is described as an ‘environmental contribution’ of 50c (£0.36) per head per day up to a maximum of €5 (£3.66) from next April. 

Visitors under 18, and language students, will be exempt.

The revenue generated by the levy – a total of €6 million (£4.39 million) – will be supplemented by the National Development Fund and the money will be used by a foundation which will be set up with the Malta Hotels and Restaurants Association for the maintenance of tourist zones.

#Malta and #Gozo residents will also have to pay the levy when staying at a hotel.

Meanwhile, tourism police will undergo a course at the Institute of Tourism Studies aimed at helping foreign visitors during their stay in a more effective manner. Additional police officers will be assigned duties in tourist areas.

Go Holiday editor David Kernek comments: It’s impossible to argue against charges like this, especially as people who’ve paid out for a holiday in Malta will hardly have trouble finding an extra 36p a day. What’s profoundly annoying, though, is the refusal of politicians and bureaucrats to call a spade a spade: this ‘environment contribution’ is in plain Anglo-Saxon a tourist tax.

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Greek islands to lose VAT subsidies as EU cuts bite

SIX Greek islands this month lose their VAT (Value Added Tax) rate subsidies as part of the country’s third creditor bailout package.  

A package of cuts was agreed by the Greek government – against the wishes of voters in a referendum – as part of a financial bail-out deal with the European Union, the International Monetary Fund and European Central Bank.

The holiday islands are Mykonos, Naxos, Paros, Rhodes, Santorini, and Skiathos. 

The ending of the tax subsidy will hit the cost of hotel and villa #accommodation, and the prices at cafes and restaurants. There was significant campaigning against the rise, with concern that it would damage the key Greek tourism industry. But #Greece’s creditors made it a condition of the latest bail-out. 

Other Greek islands are likely to lose their VAT rate subsidies next year and in 2017.

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Picture Credit: http://www.flickr.com/photos/30400715@N08/5873947732">Mykonos church</a> via <a href="http://photopin.com">photopin</a> <a href="https://creativecommons.org/licenses/by/2.0/">(license), http://www.flickr.com/photos/54555810@N00/3878620643">Blue_Domed_Church_Oia_Santorini</a> via <a href="http://photopin.com">photopin</a> <a href="https://creativecommons.org/licenses/by-sa/2.0/">(license)

Rome looks at 500% tourist tax rise

ROME’S city government is debating a proposal to increase its tourist taxes for visitors during its jubilee year in 2016. Each coach load of tourists would be charged a daily rate of €1,000 (£725) to enter the city centre to see sights such as the Vatican, a 500 percent rise on the current price of a coach permit (€200/£145). This would be in addition to a higher tax on accommodation that tourists already have to pay, which has doubled on last year. 

Tour operators and travel agents are objecting to the proposal. The European Tourism Association (ETOA) said it is extremely concerned by the plans. ‘Imposing a fivefold increase on the existing €200 daily permit is out of all proportion,’ it said in a statement. ‘It threatens pre-paid contracts for travel in 2016 and beyond and is yet another cost that is making Rome an expensive and unpredictable destination.’

The association calculated that, under these proposals, a visitor in a group of 40 people staying in a 4-star hotel would be paying €33 (£23.93) in local taxes a night.

It was suggested that agents might be forced to reconsider how much time is allocated to #Rome in travel itineraries.

Tom Jenkins, CEO of ETOA said: ‘This behaviour seems vicious and irrational, with no regard to practicality or planning. What will these visitors receive in return for this tax increase? That this was announced in the same month as the bid for the 2024 Olympic Games shows that the aspirations of Rome and the reality of their organizational capability live in separate worlds.’

Rome's Holy Year is a ‘year of mercy’ announced by Pope Francis, which should bring thousands of pilgrims to the city.

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Balearics tax will 'drive off tourists'

TOURISTS will be ‘driven away’ from the #BalearicIslands if the destination’s government reintroduces a tax on visitors, says Thomas Cook chief executive Peter Fankhauser.

The proposed #eco-tax, which would cost €1-€2 per person per night from next year, is intended to help preserve the islands’ environment. If introduced, it could add £80 to the cost of a two-week holiday for a family of four.

The islands, which attract almost 3.5 million visitors from the UK each year, scrapped a similar tax in 2003 just one year after it was introduced, because it was deterring holidaymakers.

But last week the islands’ vice-president and tourism minister, Biel Barceló, told a parliamentary hearing that it would apply a tourist tax in 2016 ‘with or without the help of the state’ because it is ‘absolutely necessary’.

Mr Fankhauser said in a statement that the tax could lead to families, in particular, turning to cheaper destinations.

A spokesman for the Association of British Travel Agents said that should the association receive official confirmation of the levy, it would write to the Balearics government ‘reminding it that the tax would have only the unintended consequence of driving tourists away from the islands’.

The proposed tax is under discussion and a limit on the number of nights charged is being considered. There would be an exemption for young children and it is ‘very likely’ that it would be reduced out of season.

A spokesman for the Balearics government said: ‘The aim is to preserve this paradise, which so many Britons visit year after year.’

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Tourism study finds positive effect on destinations

TOURISM’S impact on destinations far outweighs its negative effects, a Travel Foundation study has found.

The findings are a first for the industry that until now has seen travel and tourism measured chiefly in arrivals and their estimated impact on value – or otherwise – to the economy.

The Travel Foundation study – conducted with Tui Group and business services and consultancy firm PwC in Cyprus –used a method known as TIMM (Total Impact Measurement and Management) for quantifying impacts not only on the economy and taxation but also on the environment and destination communities.

The study took in eight mainstream hotels catering to 60,000 visitors, or 2.5% of the annual total to #Cyprus. The purpose was to assess the full impact of tourism and to enable comparisons between impacts in different areas, so that decision-makers could compare ‘alternative strategies’.

It calculated the total economic impact of visitors to the hotels at an average €59 (£42) per customer per night. The tax impact was an additional €25 (£18) per night – about one-third of this in direct taxation.

By contrast, the environmental cost was €4 (£2.86) per customer per night, with greenhouse gas emissions accounting for €2.50 (£1.80), despite flights being excluded from the study.

Waste was the second-biggest environmental cost, with hotels producing 1.8kg (3.96lbs) of waste per customer a night, compared with 1.4kg (3lbs) for the average Cyprus resident – despite the hotels recycling more than domestic residents.

However, the suppliers to hotels and businesses serving tourists outside the hotels were found to generate 14 times as much waste – an average of 25kg (55lbs) per customer every day.

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Greek VAT hike a ‘kiss of death’

VALUE ADDED TAX (VAT) in #Greece has been increased from 13% to 23% on food, transport, and restaurant meals from July 20. It will be followed by a similar rise for hotels in October.

In a note to members, the Association of British Travel Agents (ABTA) said: ‘You will be aware of the announcement of VAT increases which the Greek parliament has agreed to, as part of the package to obtain a financial bail-out. The intention is that many of these increases will come into effect from October 1, 2015, so they would not affect the majority of holidays for this summer.’

But Xenophon Petropoulos, of the Greek Tourism Confederation, said last minute bookings –which comprise one-fifth of holidays – were down by a quarter in recent weeks.

‘We know the tourist industry must help kick-start the #Greekeconomy but this VAT rise is a big burden for us,” he said.

Thanassis Papanikolaou, head of an association of restaurant chains, described the tax increase as ‘a kiss of death’.

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Travel facts . . .

MORE than 250 million people visited #California in 2014, when travel-related spend reached $117.5 billion (£74.7 billion), supported one million jobs and generated $9.3 billion (£5.9 billion) in state and local tax revenues, reports Visit California. 

A study done for Visit California shows that 53 out of California's 58 counties saw an increase in direct travel spending compared to 2013.

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Abolish APD, say UK airlines

LEADING airline companies in the UK have again asked politicians to abolish Air Passenger Duty (APD). The renewed plea was made as it emerged that 136 countries are more competitive than Britain when it comes to air ticket taxes and airport charges.

The UK is ranked 137th out of 138 countries in the World Economic Forum’s biennial global Travel & Tourism Competitiveness Index, just above Chad at the bottom of the table. Britain trails behind European competitors such as Sweden (26th), Spain (55th), Italy (83rd), Germany (110th), and France (114th).

Countries outside of Europe that are actively encouraging the development of their aviation sectors rank highly, including Qatar, India, Turkey, United Arab Emirates, and China.

The UK has such a low ranking because most countries do not tax air travel or do so at significantly lower rates, according to the British Air Transport Association (BATA).

Figures released last week by HMRC showed that passengers paid £3.17 billion in APD in 2014-15. Germany has the next highest tax in Europe, but its aviation tax raised just £745 million in 2014. More than 20 EU countries do not have an equivalent tax on flying.

The UK’s Office for Budget Responsibility estimates that the tax take from APD will increase by a further £500 million over the next five years. Passengers will be paying £3.7 billion a year by 2019/20.

BATA chief executive, Nathan Stower, said: ‘We knew UK Air Passenger Duty is sky- high compared with our competitors in Europe. We know now that it is one of the least competitive taxes in the world. The next government should end this damaging tax on trade, tourism and families, and abolish APD in the new Parliament.’

EasyJet chief executive, Carolyn McCall, said: ‘The World Economic Forum rankings show that the UK is in the top five of countries with the highest aviation taxes in the world. This is further proof that APD is a tax that is making the UK less competitive, with a negative impact on UK tourism, investment and business activity. Abolishing APD would boost the UK economy and pay for itself by increasing revenues from other sources. Research by PwC has revealed that the GDP boost to the UK economy would amount to at least £17 billion in the first three years and result in almost 60,000 extra jobs in the UK over the longer term.’

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Hospitality body wants tax cut from new UK government

THE UK’s new government should cut tourism Value Added Tax (VAT) to 5%, according to the British Hospitality Association.

Said chief executive Ufi Ibrahim: ‘Our top agenda item for the Prime Minister and the Chancellor is to cut tourism VAT to 5%, which could massively boost jobs, bring billions of new revenue to the Treasury, and directly improve the livelihoods of people in struggling communities across the UK.

‘Let's hope consumers are the winners in the final result, and can look forward to the benefits of an increasingly healthy economy.’

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Ryanair changes sports kit charges

RYANAIR has improved its sport equipment carriage service and reduced its fees from a £50 flat rate into five different categories; bike, large sport, skis, golf bag, and small sport, making it easier for passengers to travel with their kit.

Passengers can book the following options:

Bike - £60 each way
Large sport (including but not limited to surfboard, canoe, kayak etc.) - £60 each way
Skis - £40 each way (reduced from £50)
Golf bag - £30 each way (reduced from £50)
Small sport (fishing rod, bowling ball, racquet, hockey stick etc.) - £30 each way (reduced from £50)

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Egypt shelves plan to halt visas-on-arrival for lone Brits

EGYPT has shelved its plan to deny British tourists the opportunity to apply for visas on arrival, instead announcing that an electronic visa system would be introduced.

Last month, the Egyptian Foreign Ministry announced that from May 15, all Britons not part of tour groups visiting the country would no longer be able to apply for a visa on arrival. Instead, they would have to apply and pay for a visa in London prior to departure.

The decision was seen as a move to tighten security measures in Egypt, which has faced threats from Islamic militants.

The reversal came after the government faced criticism from the country’s tourism sector, which has struggled to recover from the recession and political instability.

As a result, independent travellers can still apply for a $25 (£17) visa on arrival at Luxor, Cairo, and a free entry stamp at Sharm el-Sheikh.

The Association of British Travel Agents (ABTA) welcomed the decision.

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