US calls for an end to air passenger duty

Posted 09/11/2011

The US travel industry has written to Chanceller George Osborne urging him to ditch plans for a 10% increase in air passenger duty next year.

 

Headed by the Air Transport Association, the letter's signatories have asked the UK government to freeze APD next year and ultimately to phase it out altogether.

 

The letter said APD was a "tax grab" on airline passengers "for the purpose of deficit reduction".

 

"We believe the APD tax unfairly penalizes airlines and their customers," it said.

 

It pointed out that plans for a similar tax in Belgium, Ireland and the Netherlands have been abandoned after these governments concluded the harm to jobs and taxable economic activity would exceed APD-related revenues.

 

"The APD tax significantly reduces demand for air transportation today and any increase will worsen that situation," it said. "Demand for air services will inevitably suffer."

 

APD is due to increase next year, which would mean a family of four flying to the US will have to pay £260 in tax, up from £80 in 2006.

 

"A 225% increase in taxes clearly impacts the propensity of individual to travel by air, as has been evidenced by the well-documented decrease in traffic from UK airports, particularly when compared to other EU airports," said the letter.

 

The signatories, which include the American Society of Travel Agents, IATA and tourist boards amongst other, are also concerned that the tax is acting as a deterrent to US citizens travelling to the UK. "Such a high tax clearly makes the UK a less desirable destination, ultimately depriving the UK economy of the substantial benefits that international visitors provide," they said.

 

They urged Osborne to freeze the tax next year and gradually phase it out.

 

By Linsey McNeill

 

Originally published 9 Nov 2011 at: http://rss.feedsportal.com/c/398/f/5923/s/19ed312a/l/0L0Stravelmole0N0Cstories0C1150A1680Bphp0Dmpnlog0F1/story01.htm