Move to collect customs worrying local charter operators
A move by the Department of Customs to collect duties from local commercial charter operators is being met with some resistance from the owners of the aircraft, who say the measure has the capacity to”shut down”the fledgling industry.
The Bahamas Aircraft Operators Association is seeking duty exemptions on their aircraft after the Department of Customs issued letters to several commercial aircraft carriers last week advising them to pay customs duty or face possible aircraft seizures.
Association member Captain Randy Butler, who is the CEO and president of SkyBahamas, told The Guardian yesterday that a letter is being drafted to Prime Minister Hubert Ingraham in response to the notice from the Department of Customs.
He said the association wants exemptions similar to those given to taxi drivers. In mid-2008 the government extended the customs duty and excise tax exemption related to the importation of new vehicles by taxi and livery franchise operators.
“Basically the government needs money,” Butler said, giving his opinion why the government is now seeking customs duty from the local air carriers.
“Maybe they think the aviation carriers have lots of it. Basically they’re on a fishing trip and are hoping to catch a grouper.”
Butler said despite going to the customs department seeking clarification, he still doesn’t understand what’s going on. He claimed that a representative from that department was unable to explain on what basis he was being taxed.
The Department of Customs is reportedly giving the carriers 14 days to pay the customs duty.
Butler said there is a 10 percent customs duty on every aircraft. For an aircraft costing $200,000 the rate imposed would be $20,000.
He said if carriers are forced to pay those fees, several of them may be forced to shut down.
“The economy is down, travel to the Family Islands is down, NAD is about to increase its fees…some carriers may be able to find the money but it will hurt the bottom line. We would have to significantly cut back. To be honest with you, it will hurt the airlines in a big way. It could shut us down,” he said referring to the local aviation industry.
“Some may survive but some will not,” he added.
Butler said aviation companies already pay substantial fees for landing costs, business licenses, National Insurance and employee salaries.
He said to take on additional cost in the current environment would be very difficult.
“The problem is the government is not consulting with the stakeholders,” Butler said.
“There is no strategic plan from the government so all of us are being affected at some point. Also there is no strategic plan for aviation-we have ad hoc rules, fees and policies that just don’t make sense.”