The newly formed Fair Tax on Flying alliance has called on the UK to follow the example of the Irish Republic which has abolished the tax on passengers flying outbound.
The move by the Irish means the UK is now one of just four countries in Europe to levy taxes on air passengers after the Dutch, Swedish, Danish and Maltese all axed their taxes.
Although the UK’s new Tourism Strategy called for barriers to tourism growth to be addressed the UK drew criticism from both the UNWTO and the WTTC last week for its stance on tax.
More details of a reformed APD are due to be announced in this month’s budget and there are fears the reform will be used to increase the overall level of tax take from the travel sector.
According to the Fair Tax on Flying campaign the UK government will raise £2.2 billion through APD this year and is threatening to hike this to £3.6 billion by 2015. Other European countries have ditched APD-style taxes citing the damage they can cause to economic development.
Mark Tanzer, Abta chief executive, said: “The Irish Government is just the latest to see that taxing air passengers is counter-productive with any revenue raised outweighed by the damage caused to the wider economy.
“The Fair Tax on Flying campaign urges the chancellor to take a lead from the Irish and not hike aviation tax even higher if he is sincere in his intention to help travel and tourism grow and flourish.”
Amanda Wills, managing director of new alliance member Virgin Holidays, said: “Virgin Holidays is 100% behind the Fair Tax on Flying campaign. We believe a fairer flight tax system is critical for both the UK economy and overseas destinations which are reliant on the income generated by international tourism.
“We urge the chancellor to work with the travel and tourism industry on developing a system that encourages choice, allows us to remain competitive against other markets, promotes a sustainable contribution to the destinations to which we send our customers and which finally allows our sector to continue to contribute to the growth of the UK economy.”
The UK currently charges passengers the highest rates of aviation tax in Europe; £12 on economy flights to Europe and up to £85 on long haul flights with these amounts doubling on premium rated fares. The Irish levied a €3 flat rate.