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Scrap flight tax to boost economy, say airlines Scrap flight tax to boost economy, say airlines
(about 1 hour later)
UK-based airlines have launched a renewed attack on air passenger duty with a report that claims the UK economy would be boosted by £16bn a year if the tax was scrapped. UK-based airlines have launched a renewed attack on air passenger duty (APD) with a report that claims the UK economy would be boosted by £16bn a year if the tax was scrapped.
Commissioned by four British airlines including British Airways, the report by PricewaterhouseCoopers claims that the abolition of the tax would create almost 60,000 extra jobs in the UK in the long term. It adds that scrapping APD would pay for itself by increasing revenues from other sources such as income tax and VAT.Commissioned by four British airlines including British Airways, the report by PricewaterhouseCoopers claims that the abolition of the tax would create almost 60,000 extra jobs in the UK in the long term. It adds that scrapping APD would pay for itself by increasing revenues from other sources such as income tax and VAT.
The boost to GDP would come from three main sources, the study says: extra investment by airlines; more tourist visits to the UK; and a boost for domestic businesses from more business travel.The boost to GDP would come from three main sources, the study says: extra investment by airlines; more tourist visits to the UK; and a boost for domestic businesses from more business travel.
PwC said: "Abolishing APD has the potential to reduce the cost of flying, making it cheaper for businesses to maintain relationships with overseas customers. In this sense APD could be regarded as a tax on exports."PwC said: "Abolishing APD has the potential to reduce the cost of flying, making it cheaper for businesses to maintain relationships with overseas customers. In this sense APD could be regarded as a tax on exports."
It added: "APD is at least as damaging to the UK economy, and probably more so, than corporation tax or fuel duty."It added: "APD is at least as damaging to the UK economy, and probably more so, than corporation tax or fuel duty."
Introduced in 1994, APD has since January 2007 increased by up to 260% for short-haul flights and up to 360% for long-haul flights. APD costs £13 for a short-haul flight and up to £92 for a long-haul journey.Introduced in 1994, APD has since January 2007 increased by up to 260% for short-haul flights and up to 360% for long-haul flights. APD costs £13 for a short-haul flight and up to £92 for a long-haul journey.