Missed reform of notorious tourism tax

Speaking in response to the government’s announcement on Air Passenger Duty (APD) today, David Scowsill, President and CEO, World Travel & Tourism Council (WTTC), said:

“Today’s announcement on APD is a missed opportunity to reform one the world’s most notorious tourism taxes. APD has always been a blunt instrument and a bad tax. Whether in its current per-passenger form or as a per-plane version, it is bad for the consumer and bad for the international competitiveness of UK plc. APD does not go towards any aviation or transport projects; it provides no incentive for airlines to operate newer, cleaner aircraft, or for the consumer to choose ‘greener’ options.

“A bad tax was made even worse in 2009 with its discriminatory distance-based approach to long-haul destinations – for example, the Caribbean is closer to the UK than the US West Coast yet it is in a higher band.

“The UK should learn from their neighboring countries, such as the Netherlands, who repealed a $412 million departure tax because it cost the economy $1.6 billion.

“According to the Treasury’s own consultation, aviation creates over 250,000 jobs directly, and supports an estimated 200,000 through the supply chain. It is also a principal artery for the wider travel and tourism industry, which contributes £105 billion, or around 7 percent, of the UK’s GDP and supports 2.3 million jobs.

“It is time for a full cost/benefit analysis of APD to be undertaken to measure its contribution to the UK taxman against its damage to the wider UK economy in terms of job, competitiveness and GDP contribution.”