The Tribune

By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

The Government’s top finance official yesterday challenged the “uproar” over the increase in Customs and other aviation fees, adding: “Persons who benefit from our country should pay their fair share.”

Simon Wilson, the Ministry of Finance’s financial secretary, defended the Davis administration’s decision to increase “inbound” and “outbound” Customs fees for aviation operators at a Rotary Club of West Nassau meeting.

He reiterated that Family Island airports are in dire need of upgrades, and it is a globally-established principle that users should contribute to the cost of those improvements and ongoing maintenance since they will end up benefiting from this.

“No Bahamian would disagree that there have to be improvements in airport facilities in the Family Islands. I think no Bahamian would also disagree that that the user should contribute. Persons who use the facilities should contribute,” Mr Wilson said.

“Most of the air traffic in this country is private airlines, especially to the Family Islands. Most of the Family Island traffic is not two-seaters and three-seaters and private owner flyers. Most of them are chartered jets.”

Mr Wilson said it is “straightforward” that persons using and benefiting from airport facilities should “pay their fair share of taxes”, and the magnitude of the fee increases should not be cause for such an “uproar” from private plane owners and pilots.

He added: “If you look at the numbers, the numbers would tell you The Bahamas is the number one private jet aviation destination in the Caribbean. The question you need to ask yourself is how much does it cost to charter a jet from the US to North Eleuthera, and if we charge $50 more should that be an uproar or all the news print that we are getting for charging $50 more?

“As right-thinking Bahamians, we should all be saying: ‘This is our country. We have to build this country, and persons who benefit from our country should pay their fair share of taxes. To me, it’s straightforward.”

Mr Wilson said visitors to the Family Islands often fly in on G-5 jets, and demand better runways and facilities, but airports are costly to upgrade so money has to be raised by increasing user fees.

He said: “When we look at the traffic in the country, it is not Aztecs flying in from Miami or wherever, which was 50 years ago. The composition of traffic has changed so much, and these persons are demanding services. They’re saying we want better runways, we want better taxi ways, we want better terminals and so forth.

“As a country, we have to borrow and invest to provide those services. Our citizens are demanding better services. No longer do our citizens want to stand in a shed waiting for the Bahamasair plane. And the way you have to do that is you have to raise taxes. I think that’s a message we can’t ignore. These investments cost money and the way we get the money is raise taxes.”

Mr Wilson said the Government tries to be “prudent and moderate” with tax increases but sometimes they are “inevitable”. He added: “We try to be very prudent and moderate with any change in tax rates. Increased tax rates are always a very difficult thing, and that for us is always the last step we will take. But there has to be understanding that, at the end of the day, in some areas that is inevitable.”

One private pilot estimated to Tribune Business that The Bahamas could lose between “50,000-100,000 flights per year right now because of the fees” being increased.

Private planes brought 323,000 air arrivals, or one out of every six higher-spending stopover visitors, to this nation in 2023. Some 95,000 of that number came from Florida alone and, giving an insight into what is at stake, the total was more than combined visitor numbers from Canada, Europe and Latin America.

The Customs Management (Amendment) Regulations 2024 changed the aircraft inbound and outbound fee structure such that it appears a private plane with more than four seats now pays three times’ what a regularly scheduled commercial jet does.

Under the new fee structure, commercial jets have to pay a $50 “inbound” and $50 “outbound” fee for a total of $100. However, a private plane with four seats or less “including all seats in the cabin” is now faced with paying $75 each way for a total of $150.

That is slightly more than the $100 fee for a commercial jet, but private aircraft with more than four seats “including all seats in the cabin” now face having to pay $150 “inbound” and “outbound” fees to Customs for a total $300. So-called “recreational” flights will only pay $150 “inbound”, but cargo flights will see a $150 fee levied on both “inbound” and “outbound” trips involving The Bahamas.

For private planes and private aviation, the fee increases represent a three-fold and six-fold increase, respectively, on the previous Customs fee structure which was $50 “inbound” and zero “outbound”. Meanwhile, the Customs fee increases have coincided with the new and higher charges levied by Bimini’s new private airport operator, which also took effect on July 1.

These have imposed a range of landing and parking fees on private aviation operators, as well as commercial airlines, along with new passenger facility and processing fees. These are being viewed as setting a precedent, and a foretaste of further fees to come at other Family Island airports when the Government outsources their redevelopment to other private operators and investors.

Bimini Airport Development Partners (BAPF), in an updated May 3, 2024, notice to commercial, charter and private aviation customers, served warning of its intent to impose a passenger facility fee on travellers from July 1, 2024, this year. These fees were set at $20 for domestic travellers, and doubled to $40 for international passengers.

Meanwhile, the passenger processing fee was pegged at $5 for domestic, and $10 for international, travellers with both categories also having to pay a $1 “passenger levy”. In total, these additional fees come to $26 for domestic passengers and $51 for their international counterparts, and are on top of the $29 per head departure tax.

The BADP fee schedule then reveals that the passenger facility fee is being increased to $25 for domestic travellers, and $45 for international passengers, with effect from January 1, 2025. And the passenger processing fee will rise to $6 for domestic, and $12 for international, travellers with effect from that same date. Thus persons leaving Bimini to travel outside The Bahamas will have to pay an extra $58.