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Tourism Enhancement Fund (TEF)

The "Tourism Enhancement Act, 2004" was enacted December 22nd 2004.

This Act provides the legal basis for the Ministry of Industry and Tourism to establish a mechanism for the collection of a small fee from incoming airline and cruise passengers that will be placed into a dedicated fund to be used for the sole purpose of implementing the recommendations emanating from the Master Plan for Sustainable Tourism Development, 2002.

Specifically, the Act allows for:

  1. A Tourism Enhancement Fee of US$10.00 to be charged to incoming airline passengers and US$2.00 to be charged to cruise passengers.
  2. The monies collected to be paid into a dedicated Tourism Enhancement Fund established as a body corporate falling under the auspices of the Ministry of Industry and Tourism.
  3. The establishment of a management framework, required for policy and general administration of the affairs of the Tourism Enhancement Fund and for co-ordinating the implementation of the various projects and programmes. This will include a Board of Management of the Fund reporting to the Minister of Industry and Tourism and a Project Management Unit established within the Ministry.

The Act makes allowance for a Board to be comprised of not less than nine (9) or more than thirteen (13) members appointed by the Minister, with the Executive Director of the Fund being an ex officio member of the Board. The Board of Directors with thirteen (13) members was approved by Cabinet on January 31, 2005.

The Ministry is now in the process of setting up Project Management Unit as well as detailing other administrative procedures.

Since the passage of this Act, there has been active dialogue with the Board of Airline Representatives operating in Jamaica (BARJ) as well as the International Air Transport Association (IATA) with whom we intend to enter into contract for the invoicing and collection of the fees from airlines.

The draft agreement titled "Enhancement and Financial Services Agreement" is now being finalized and will soon in effect.

Arising from the discussions with IATA/BARJ, there is now an agreement on the method of counting and billing airline passengers. Please see outcome of negotiations on Appendix A attached.

MIT is also in discussions with the Attorney General's Office as to how best to develop Regulations.

May 1, 2005, is the projected effective date to begin collecting the TEF. If the deadline is met then given the period required for verification, billing and settlement it is anticipated that by the end of July we should receive the first amount from IATA. Information on the ticket code is already in the marketplace. The code is HG. It is expected that funds flowing this will build up over a period of time so the full effect of the TEF may not be felt until maybe six month later. This is because some persons would have purchased their tickets way in advance of actual travel.

Discussions were also held with the charter handling companies.

The Ministry has also been in discussion with the Port Authority of Jamaica regarding the mechanism for collecting the cruise passengers' component of the fund.

The TEF Board of Directors had its first meeting on April 14th 2005.

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