Do you enjoy a Disney cruise every now and then?
The Disney Cruise Line offers tons of fun to numerous destinations. You can visit several exclusive restaurants, lounges, and shows on the ship, and then swim with the fish on a private island. Castaway Cay in the Bahamas is Disney’s private island destination and is one of the many locations you can visit on a Disney cruise. However, visiting Castaway Cay may be getting a little more expensive.
According to Cruise Hive, the Bahamian government will soon be enforcing a new Value Added Tax (VAT) on goods and services on private islands, such as Castaway Cay.
The purpose of the new tax is to bring the operations of the private islands closer to those of local businesses. For the past nine years, private islands have not had to pay taxes on goods and services, making it unfair to the local business sector that has.
Simon Wilson, the Bahamas’ Financial Secretary of the Ministry of Finance, told The Tribune, “When we implemented VAT originally we were under the impression given to us by the cruise lines that any commercial activity on the private islands was an extension of the package purchased [by passengers] on ship — they were indistinguishable. That’s not the case.”
Wilson continued, “The private islands are much bigger, much more diverse in their operations, and they actually compete with Bahamas-based businesses for onshore excursions.” Essentially, businesses on the islands are competing with other tourist-based businesses in the Bahamas, and they are not paying their fair share of the taxes on that business.
Cruise lines, like Disney Cruise Lines operating at Castaway Cay, will have a 10% VAT placed on all passenger transactions, likely to be effective on March 1st of this year. The Cruise lines must register for the tax if they own a private island or make over $100,000 in annual taxable sales. Some cruise lines, like Carnival Cruise Line and Princess Cruises, do not own the private island they visit (Carnival Corporation does), but will still be liable for the tax if they make over that $100,000 mark.
So, what does this mean for you, the passengers? Likely, nothing will change for the cost of your trip if you’ve already booked it. Changing the price of already booked packages would be challenging for the cruise lines. This means the cruise lines may eat the cost of these new taxes, initially. But in the future, you may see higher costs for cruise packages, as well as increases on goods or services purchased in addition to your package.
Several cruise lines will be affected by this new VAT, not just Disney Cruise Lines. If a cruise you’re taking is headed to a private island in the Bahamas, your cost may be affected.
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