Time to scrap Air Passenger Tax

The world’s leading private sector of travel and tourism businesses has called for the UK Air Passenger Duty (APD) to be abolished ahead of the introduction of the European Emissions Trading Scheme in 2012.

Championed by the World Travel&Tourism Council (WTTC), the call follows the British government unveiling its budget (March 23, 2011). The budget has abandoned an industry-pacifying consultation on changes to the much-derided tax and delayed yet another rise in the fee, which would inevitably have been passed on to travelers.

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. The advent of the European Emissions Trading Scheme is an ideal opportunity for government to scrap it entirely,” said David Scowsill, President&CEO of WTTC. “It is time to admit that APD has failed to offset any environmental impact from people’s travel.”

The European Emissions Trading Scheme is much fairer and more effective in incentivising the use of cleaner, “greener” transport, while APD simply raises money for Treasury coffers with no evidence that it offsets the environmental cost of travel. By not scrapping APD, claims WTTC, the government will force British holidaymakers and business travelers to “fly once, but pay twice” when EU-ETS comes into force. It will hit people’s wallets and their ability to take a break at a time when government austerity measures are already impacting their lives.

Taxation policies such as APD could also threaten the UK’s status as a tourism destination and its international competitiveness. Travel and tourism is worth £105 billion to UK plc, 7% of GDP, and employs some 2.4 million people. Its contribution to GDP will increase by 3.7% a year and bring with it 512,000 new jobs to the UK over the next decade. However, compared to the rest of the world, the country’s growth ranks a lowly 127th out of 181 countries.

Despite economic growth facing many challenges, the travel and tourism industry is still expected to be one of the world’s fastest-growing sectors. But it must have clear support with governments investing in far smarter policies if its full potential to create jobs, increase exports, and stimulate investment is to be realized,” concluded David.

If the chancellor really seeks a ‘budget for growth,’ then it’s time to turn to tourism,” David stated.

The World Travel&Tourism Council represents the chairs and chief executives of multinational brands from aviation, hospitality, tour operator, and travel agent sectors. It works with governments around the world to encourage policies to help travel and tourism thrive.