The Cook Islands finance minister and deputy prime minister, Sir Geoffrey Henry, has defended the government's intention to tax international airlines.
Sir Geoffrey has told the Cook Islands News that it is time the airlines are treated like all other corporate bodies in the country.
He says Air New Zealand has been enjoying tax exemption for the last 30 odd years.
But the Cook Islands Chamber of Commerce has deplored the government's move, saying it has the potential to cause retaliatory measures and long term damage to vital economic partnerships.
Sir Geoffrey says he has received a letter of inquiry from Pacific Blue lawyers who wanted to know whether they would be enjoying the same tax exemption that Air New Zealand is enjoying.