Caribbean APD concession expected
Sunday, 02 Nov, 2009
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An anomaly on new Air Passenger Duty banding which penalises Caribbean destinations is expected to be ironed out this week.
The European Tour Operators Association believes the Government will act this week to coincide with APD rates going up.
The tax on air travel went up yesterday when a new banding structure was introduced to peg charges to distances travelled.
“Only the Caribbean is likely to benefit from a concession expected to be announced this week, to address an anomaly that APD on Caribbean flights is higher than on flights to the west coast of the United States because it is calculated on distances to the capital city from London,” ETOA said.
Financial services minister Lord Myners admitted during questions in the House of Lords last week that APD was a tax revenue generating measure that has little to do with environmental protection, according to ETOA
“The purpose of the air passenger duty is primarily fiscal but gives a strong nudge towards environmental considerations and will, we believe, lead to a reduction of some 0.6 million tonnes of carbon per annum as a result of the increase in the rates that is proposed with effect from 1 November,” he reportedly said.
“However, it is primarily a fiscal strategy and that, of course, is why it was introduced by the Conservative Government in 1994.”
He also confirmed that the Government would not be moved on environmental arguments that a tax on flying should be levied on each aircraft rather than on every passenger.
“We consulted widely in 2007-08 on whether we should make a change to per plane or per passenger duty but, having listened very carefully to the detailed, vociferous and consistent representations from the business lobby, we concluded that a per passenger duty – it had been introduced, as I said earlier, by the Conservative Government in 1994 – was the most effective way of introducing taxation in this area.”
But former Labour MP and government minister Brian Wilson, chairman of pro-aviation lobby Flying Matters, warned that taxes on travel could harm the economic recovery.
He said: “Voters rightly recognise APD as a ‘stealth’ tax with wings. They recognise it not only as a threat to their own desire to fly occasionally, but also as a short-sighted measure which will harm economic recovery.
“Exactly the same considerations have led other countries like the Netherlands and Spain to remove aviation taxes rather than increase them.”
by Phil Davies
Phil Davies
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