The Bahamas government has announced a delay in implementing a controversial increase in cruise passenger taxes. The new tax rates, originally slated to take effect in July 2023, will now commence in January 2024.
Carnival Cruise Line President Christine Duffy has been a vocal opponent of the increased tax rates for cruise passengers, saying people are tired of being forced to pay increased taxes while on holiday.
Government and Industry Reacts to Tax Delay
Through Deputy Prime Minister Chester Cooper, the Bahamas government has announced that implementing a tax rate increase for cruise ship passengers has been delayed until January 1, 2024.
According to Deputy Prime Minister Chester Cooper, the decision comes after careful consideration of concerns from the cruise industry.
Cruise passengers departing from Freeport, Nassau, and Bimini were to see a rise in their taxes from $18 to $23, while passengers only visiting a cruise line’s private island, such as Perfect Day at CocoCay or Half Moon Cay, would face a higher tax of $25.
Cooper stated to Eyewitness News: “Nobody wants their taxes to increase. They’ve made certain representations. We’ve taken those into consideration. The Prime Minister and I have spoken, and we will speak at the Cabinet level. Suffice it to say we have already given a seven months delay in the implementation of the tax. The tax does not come into force until January 2024.”
The revised plan also includes a $5 tourism environmental tax and a $2 tourism enhancement tax on each cruise passenger. Cruise lines and their guests have had mixed reactions to the proposed tax increase.
Christine Duffy, Carnival Cruise Line President, previously expressed her hope for a delay, stating: “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, it can get pushed out.”
“Look, if I’m on a budget, this is my budget. 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,” Duffy continued.
Opposition Leader Michael Pintard voiced worries about potential repercussions on local tourism, cautioning that new passenger taxes could motivate cruise ships to seek cheaper destinations.
Tax Increase Could Land Bahamas $95 Million in One Year
Despite the delay, the government has no plans to cancel the tax increase and still aims to significantly boost its revenue from departing cruise passengers. It projects $145 million in revenue in the 2023 to 2024 budget, a sharp increase from $50 million in the current fiscal year.
Since the global pause in operations, the cruise industry has been instrumental in rebuilding the Bahamian tourism industry. Cruise ship arrivals rose to 5,390,016 in 2022 from 1,115,181 in 2021 and have been instrumental in driving economic recovery.
The Bahamas has every right to profit from the sharp increase in arrivals, which is expected to significantly increase with the port infrastructure improvements in Nassau and upcoming projects such Royal Caribbean’s Royal Beach Club and Disney’s Lighthouse Point.
However, it’s crucial to balance the benefits against the potential backlash from the cruise industry regarding the proposed tax increases.
The delayed implementation to 2024 offers cruise companies time to adjust and implement the charges, which will be added to guests’ cruise fares.
However, ongoing negotiations will be critical to maintaining The Bahamas as a premier cruise destination while ensuring a fair contribution to the local economy.