The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian environmental advocates have backed the increased taxes and new levies imposed on the cruise industry as "a significant step in the right direction" to ensuring it does more to protect the very assets critical to its product.

Eric Carey, the former Bahamas National Trust (BNT) executive director, told Tribune Business that local environmentalists have always believed the cruise industry should contribute more financially towards safeguarding the Bahamian waters and land that it uses to attract millions of guests per year.

"I think it's a positive move," he said of the Davis administration's action. "You're dealing with an industry that has a very high environmental footprint, a very high carbon footprint. It has always been the view of us on the environmental side that the cruise industry should be doing more to protect the very environment that provides them with their tourism product - our Bahamian environment, marine and terrestrial.

"It's certainly a step in the right direction. I trust that the funds will be used to support the environment, and support organisations like the BNT and Bahamas Protected Areas Fund. It can also be used for greater investment in the Department of Environmental Planning and Protection (DEPP), which is seriously under-staffed, and to develop the Department of Marine Resources.

"It's a step in the right direction, and I hope the funds make their way to where they are needed most and not where they are not the largest environmental priority. I would like to go on record as applauding the Government for this move. This is something we've been calling for on our side for decades. It's overdue, but I like when I can to give kudos, and this is something the Prime Minister and his administration can be proud of. It's a significant step in the right direction."

The Passenger Tax Amendment Bill 2023, tabled in the House of Assembly to accompany the 2023-2024 Budget, revealed that the existing $18 per head departure tax is being increased to $23 for "every cruise passenger" leaving The Bahamas via Nassau and Freeport, and to $25 per head for all those who exit "by sea from a private island not visiting any other port in The Bahamas".

The revised tax structure, while designed to incentivise the cruise lines to call on Nassau and Freeport, and thus better spread the wealth through their passengers spending with more Bahamian companies and their employees, imposes departure tax increases of $5 and $7, respectively. They are equivalent to a 27.8 percent and 38.9 percent rise.

In addition, the Bill will also introduce a "tourism environmental levy for every cruise ship passenger arriving or leaving The Bahamas" worth $5 per head. And, finally, for good measure, The Bahamas is also applying a $2 per head "tourism enhancement levy for every passenger arriving in or leaving The Bahamas".

Combined, these two new levies will add a further $7 in taxes and fees for departing cruise passengers. Depending on whether they exit via Nassau or Freeport, or one of The Bahamas' private islands, this will take the per capita fees and taxes paid to $30 and $32, respectively, representing 67 percent and 77.8 percent jumps.

The Tourism Enhancement Levy will not come into effect until January 1, 2024, although the environmental levy and increase to the existing fees will take effect from July 1 this year, according to the Bill. "The Bill seeks to introduce a Tourism Enhancement Levy on passengers arriving [in] and leaving The Bahamas to be deposited to the Tourism Development Fund," the legislation stipulates.

That Fund will be established under the Tourism Development Corporation of The Bahamas Act 2023, which was also tabled in the House of Assembly yesterday for its first reading. The Passenger Tax Amendment Bill, meanwhile, states that its reforms are also designed to "introduce a tourism environmental levy and revise existing fees and taxes on departing cruise passengers."

As a result of the new levies and increased taxes, the Government is aiming to near-triple revenues earned from departing cruise passengers to $145m in the 2023-2024 Budget. Revenue estimates for the upcoming fiscal year revealed the Davis administration is seeking to increase "sea departure taxes" from the $50.642m initially forecast in 2022-2023, as that projection was exceeded within the year's first nine months thanks to $87.847m being collected.

The cruise lines, though, are pushing back over the timing of the increases. They are arguing that, with cruises booked 12-18 months in advance, the timing of the increases and environmental levy means they must either go back to the same passengers who have already booked a ticket to seek more money or absorb the increase themselves.

Travel Weekly, a news source on the travel industry, reported that Carnival Cruise Line president, Christine Duffy, wants the changes delayed. "There’s a lot of development happening in The Bahamas, and we’re working with the officials in The Bahamas to see if at least can it get pushed out?” she added.

The Carnival chief also said the tax increase would affect some passengers. “Look, if I’m on a budget, this is my budget,” she added. “This is what I can spend. But I mean, look at resort taxes and resort fees. I don’t want to say people have gotten used to it, but it has been piling on.”

Casuarina McKinney, principal of the Bahamas Reef, Environment and Education Foundation (BREEF), backed Mr Carey's call that the proceeds from the cruise passenger environmental levy be used "specifically for environmental protection".

She added: "The incredibly beautiful Bahamian environment - our oceans, beaches and coral reefs - is why people come here and it is in desperate need of protection if we are to continue to benefit from it in the future," she said. "This is a step in the right direction but there is still a long way to go to level the playing field given that hotels have to compete while paying hotel tax, VAT etc.

"Cruise lines are still not paying these taxes, and the new departure tax fee is still lower than that for stopover visitors that contribute much more per capita to the Bahamian economy."