A proposition is being thrown out to members of the Caribbean Community (CARICOM) to consider offering rebates or concessions to regular regional travellers in an effort to help ease the burden.
Prime Minister responsible for transportation in the regional bloc, Dr Ralph Gonsalves of St Vincent and the Grenadines gave the suggestion on Tuesday on the sidelines of the 31st CARICOM Inter-sessional Meeting of the Conference of the Heads of Government at the Lloyd Erskine Sandiford Centre.
This came moments after the new Chair of CARICOM, Prime Minister of Barbados Mia Mottley issued a call for the niggling issue of regional transportation to be resolved.
In her message during the brief opening ceremony, Mottley said the new board of management of LIAT would be doing what it could but said it was “a work in progress”.
“While all of the members of the conference of heads are not shareholders in LIAT it is necessary for me to report that LIAT now has a new board with a new mandate to be able to ensure that regional affordable transportation is made available to Caribbean people,” said Mottley, though making no mention of if governments were likely to adjust their taxes on regional travel.
However, the Barbados leader added: “To run a country without transport is to condemn that country. Similarly to run a community without affordable transport is to condemn that community.”
Mottley said CARICOM leaders also wanted to move “aggressively” towards the resolution of maritime transport issues, while indicating that the private sector would be taking the lead in relation to logistics.
Gonsalves later told Barbados TODAY the new board of management, led by former Barbados Prime Minister Owen Arthur, had a strategic plan “with many elements” and he was confident there should be a turn around in the airline’s fortunes.
“They are seeking to prioritize these various elements and to look at them,” said Gonsalves, who opted not to give further details on what was initially discussed at the board level.
He explained that Arthur was expected to discuss likely changes with the heads of governments “very shortly” and outline specifics for LIAT’s strategic plan and then each country would have time to have their own discussions.
Nevertheless, he said while a lot has been said on the taxes imposed by regional governments on regional travel, the challenge the leaders had to contend with was how best to fund the operations of their airport while finding the right balance.
“You are using the airports and you want better airports. Somebody has to pay for them. Should the taxes of the ordinary man walking the streets of Bridgetown who doesn’t travel pay for it or you and I who use the airport? It is not an easy question,” said Gonsalves.
“As always, with these matters we have to try and do a balance. Clearly it is too expensive to travel in the region and part of it has to do with taxes. Some countries have taxes as high as US$97 per person. St Vincent and the Grenadines which is on the lower end we are US$40.”
He said his administration was currently in the process of doing an analysis to determine if it could give a rebate to individuals who have to do trade within the region and therefore travel frequently.
He suggested that this was something other CARICOM leaders could consider and later expand the categories of those who would qualify.
“The question we are looking at is whether on a monthly basis we can’t give them rebate. They pay the taxes but on a monthly basis give them the rebate of the taxes which they pay – the registered traders. So that is one way in which you can help some people who are using the planes frequently to do trade.
“Maybe if you begin with that you can give exemptions or rebates to some other groups, maybe journalists who are travelling frequently. So we have to look for ways to try and find a good balance. In an ideal world you could get rid of all the taxes but often in these countries if you remove the eye tax, you have to put a nose tax or a mouth tax,” he quipped.
In relation to getting support from countries who currently benefit from LIAT but do not make a contribution, Gonsalves said he was yet to see any interest from those countries, but said it was a matter about which he would continue to voice concern.
He said while he was confident that Arthur would be influential, for some governments “you will need more than a former prime minister with great prestige. You are going to need the Holy Father,” the St Vincent leader said.
Gonsalves said it was not a matter of pulling the airline service, adding that “what you might be doing is cutting off your nose and spoiling your face”.
On the broader issue of air transport in the region, Gonsalves said some countries were yet to sign on to the Multilateral Air Services Agreement (MASA), and while a number of them have signed, they were yet to ratify.
The MASA framework, which was opened for signature in February 2018, would give effect to CARICOM becoming a liberalized environment for regionally-owned air carriers.