The Government of The Bahamas is embarking on a bold initiative to significantly bolster its cruise tourism revenue.
The key to achieving this goal is the recently proposed Passenger Tax Amendment Bill 2023, which includes a substantial increase in departure taxes for cruise passengers.
Departure taxes to increase
The current departure tax stands at $18 per passenger. Under the new proposal, this tax will undergo an approximate increase of 27%, rising to $23 for passengers whose ships leave from the main ports of Nassau and Freeport.
For those departing from a private island by sea without stopping at another port within the country, the tax increase is steeper at about 38%, bringing it to $25 per passenger.
In addition to the hike in departure taxes, the bill introduces two new tax levies: a $5 tourism environment tax and a $2 tourism enhancement tax for cruisers. This means that passengers departing from Nassau and Freeport will now be charged a total of $30, whereas those leaving from a private island will be charged $32.
The new taxes and the increased departure tax are set to take effect on 1st July 2023, with the exception of the tourism enhancement tax, which will be implemented on 1st January 2024.
National economic well-being
This increase in taxes is part of a strategic effort by The Bahamas to nearly triple its annual revenues from cruise tourism, which currently stands at around $50 million. The government aims to boost this figure to approximately $145 million.
The Bahamas, widely known as a popular cruise destination, is looking to capitalize on its status by securing a more sustainable income stream through this tax increase. The country is a favoured stop for major cruise lines, and many of these companies operate private islands in the area.
As of now, major cruise lines have not made any public statements regarding the tax increases. Reports suggest that discussions are being held privately between the cruise trade groups and Bahamian officials.
For cruise passengers, this means that the cost of experiencing the idyllic shores of The Bahamas will increase. However, this also signifies passengers’ direct contribution to the economic well-being of a nation that relies heavily on tourism revenue.
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