The charge levied on airline passengers age 12 and over departing from Cayman that funds passenger security measures has been increased by $2.50 (US$2.90) per passenger, according to the Cayman Islands Airports Authority.
The airport security tax was increased from $8 to $10.50 per passenger on March 30 by order of Cabinet, the first time that tax has gone up since 2003, according to authority Chief Executive Officer Albert Anderson.
The new charges will come into effect later this year, Mr. Anderson said. The airports authority must first notify international air transport regulatory bodies of the departure charges, which must be implemented on all air carriers who travel to the Cayman Islands.
In 2015, more than 556,000 passengers departed from Cayman Islands airports, meaning an additional $1.4 million would have been collected on those departures if the fee increase was in place at the time and all of those passengers were at least age 12. Future annual collections will depend on the number of departures, officials said.
“Due to the increases in security requirements over the years, it has become necessary for the Cayman Islands Airports Authority to raise the security tax from $8 to $10.50,” Mr. Anderson said. “The Charles Kirkconnell International Airport in Cayman Brac has also had to significantly increase security levels to meet regulatory requirements now that it’s handling international flights.”
Work at the Brac airport terminal began in 2013 and carried an estimated $2.5 million price tag. Prior to the required security improvements, international flights had to be routed from the Brac back through Owen Roberts International Airport on Grand Cayman.
Accommodation of a larger ticketing hall, improved passenger and baggage screening areas and new outgoing immigration checks have allowed direct flights to and from Cayman Brac and Miami in recent years.
“The safety and security of passengers is a top priority for the Cayman Islands Airports Authority and the security tax increase is necessary to ensure that we continue to meet all the applicable aviation security regulations,” Mr. Anderson said.
Assorted fees charged to passengers in the Cayman Islands, from environmental taxes, to departure taxes, to terminal fees and the passenger facilities charge were totalled at nearly US$65 per plane ticket in mid-2014.
When asked about the passenger fees at that time, Mr. Anderson said there were “no plans for any further raises in the near future.”
An accounting analysis by PwC of the proposed Owen Roberts Airport expansion in Grand Cayman noted the passenger facilities charge stood at US$15.85. The PwC analysis stated that, although those fees were expected to be the main source of funding for airport expansion, there was “limited scope” to raise any airport fees and taxes because those levies are already quite high when compared to the rest of the Caribbean region.
Government Finance Minister Marco Archer has regularly pledged against the Cayman Islands government raising new fees and renewed that pledge again as early as last November during the administration’s strategic policy statement.
Mr. Archer said the upcoming 2016/17 government budget will contain no new taxes or fees for the financial year, which starts on July 1.
“Government does not plan to introduce any major new revenue measures during the next three financial years,” Mr. Archer said in November. “Instead, we are focusing our efforts on improving the enforcement and rate of collection on the existing suite of revenue measures.”
The Cayman Islands Airports Authority is a separately run statutory authority, operated under the auspices of a government-appointed board rather than directly under the civil service and deputy governor’s office.