Hiking the Airport Exit Fee is Lunacy

Spanish/Español

... the additional funds have to come from somewhere, so Congress has decided to stick it largely to foreign tourists, business travelers, and volunteer workers -- or precisely those who are already investing their dollars, time, and expertise in Honduras. I cannot begin to convey to you have absolutely suicidal this move by Congress is.

By Marco Cáceres
Earlier this week, the guy in charge of the Executive Directorate for Revenue (DEI) -- Honduras' equivalent to the International Revenue Service (IRS) in the United States -- estimated that only 1.9 percent of the economically active people in Honduras pay taxes to the state. It is widely acknowledged that part of the problem lies in the fact that tax payment administration and enforcement by the government is horrendous. The other part of the problem is simply due to the lack of a cultural norm within Honduran society -- particularly among members of the upper class -- for paying taxes. This combination is one of the main reasons the Honduran government never has enough of its own funds and, consequently, is faced with having to constantly look for other sources of revenue, including loans, donations, and debt pardons from foreign governments, international lending institutions, and charitable aid organizations.

In an effort to raise money for construction of a new commercial airport at Palmerola Air Base in the city of Comayagua, the National Congress on Wednesday night passed legislation authorizing the firm that manages the airports in Honduras -- InterAirports SA -- to raise the exit fee for international flights from US$37 to US$60 per passenger. One of the reasons given by InterAirports for the proposed tax hike is that the number of passengers flying out of the country's four airports has remained at about half a million per year. In the meantime, of course, airport operating costs have risen and new construction projects (such as Palmerola) are being developed.

In short, the additional funds have to come from somewhere, so Congress has decided to stick it largely to foreign tourists, business travelers, and volunteer workers -- or precisely those who are already investing their dollars, time, and expertise in Honduras. I cannot begin to convey to you how absolutely suicidal this move by Congress is. It was either made out of complete desperation or total incompetence... or, of course, both.

Given the unending barrage of bad publicity Honduras is getting worldwide due to the growing wave of murders, revelations of ties to organized crime within the National Police, the deployment of the military to help police streets and neighborhoods, and the increased US military presence in the country to help combat illegal drug trafficking, the Honduran government should be going out of its way to attract tourists, business travelers, and volunteer workers. As it is, the government is doing exactly the opposite.

While the 62 percent increase in the airport exit fee may raise more tax revenue in the short-term, in the mid- to long-term it will serve as a disincentive to people who are thinking about returning to Honduras. And rightly so. Take for example a volunteer team of 50 physicians, nurses, and translators from the US who go to Honduras six times a year. Currently, the team pays about US$1,850 in exit fees per trip -- or a total of US$11,100 annually. Each team member is already paying US$1,500 per trip for the privilege of volunteering his or her time and expertise to providing free services to the Honduran people. Now, the team is going to be required to pay US$3,000 per trip -- or a total of US$18,000 a year -- just to leave the country?

You can bet that many teams will re-evaluate their plans to go to Honduras, because suddenly the trip has gotten much more expensive. Either the teams will disband, or they will choose to go to another Central American country like Nicaragua, El Salvador, Guatemala, or Costa Rica, which have airport exit fees of US$35, US$32, US$30, and US$26 respectively. And I wouldn't blame them a bit. At that moment, Honduras has not only forfeited the US$18,000, but also about US$50,000 -- or a total of US$300,000 per year -- the team might spend in-country on food, transportation, lodging, site-seeing, souvenirs, and tips. And this doesn't even take into account the money that teams often leave behind for the projects they're working on... clinics, schools, orphanages, women's shelters, water purification systems, micro-enterprises, wages for hired workers.

Now, consider that there are thousands of volunteer teams that travel to Honduras each year, ranging in size from 10 members to as many as 100. What happens if half of those teams opt out of Honduras because of the exit fee hike? Do the math.

Soon, the government, the business community, and thousands of civil society organizations in Honduras will be wondering why people who used to visit Honduras regularly have stopped coming. They'll be dreaming nostalgically of the "good 'ole days" when social tourists were plentiful and there were active relationships with countless North American churches, hospitals, universities, medical brigades, foundations, and Rotary Clubs.

Whoever proposed the idea of dramatically raising the airport exit fee and played an active role in drawing up the bill and getting it passed through Congress has done a tremendous disservice to the country. The thought process here is so flawed that it boggles the mind.

If it were acting rationally, the government would be providing incentives for people to visit and invest in Honduras. Ideally, the exit fee would be reduced for tourists and business travelers, and it would be eliminated altogether for volunteer workers. But at the very least, the government should avoid issuing new disincentives.

The authority to raise the exit fee should promptly be repealed. The Congress should quit trying to milk more money out of those who are already doing more than their fair share to help the people of Honduras, and it should focus on getting Hondurans -- especially those with means -- to pay their share of the taxes needed to run the country. (12/16/11)

Note: The author is the editor and cofounder of Honduras Weekly. He is also the cofounder of projecthonduras.com, an international network of volunteers involved in humanitarian development projects aimed at empowering the people of Honduras. He directs the annual Conference on Honduras in the town of Copán Ruinas in northwestern Honduras. He was born in Tegucigalpa.