Irish govt scrapping air tax

Hotel News - 14/03/2011

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The Irish government is vowing to end the taxation of air travel. The Fine Gael-Labour coalition is aiming to give the country’s tourism a boost.

From 2007 to 2010, the number of visitors flying to Ireland dropped to 5.6 million from 7.7 million. Two years ago, Ireland launched an air passenger tax at €10 per person. The rate was dropped last year to €3.

In 2009, the government of the Netherlands abolished its own air travel tax. Though the Dutch tax was brought the government roughly €300 million in annual revenues, the tax was thought to cost the overall Dutch economy at least €1.2 billion.

A concerted campaign by several groups in the UK has been trying to pile increasing pressure on the government to scrap the APD. Calls to end air travel taxation have mounted in recent days, ahead of the Chancellor’s new budget.

Travel association Abta’s chief executive Mark Tanzer Ireland was only the latest in a series of nations to figure out that taxing air travellers was counter-productive. He said that any revenues the tax generated were outweighed by the harm done to the wider economy.

The UK currently has the highest rate of aviation tax anywhere in Europe. The Government generates some £3.8 billion every year from the Air Passenger Duty.

The Chancellor is widely expected to announce positive moves regarding pensions and fuel tax in the next budget. Campaigners are hoping the progressive moves include an abolition of or at least substantial reduction in APD.

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