The government has been accused of “turning a blind eye” to the damage caused to inward investment and job creation in the UK by Air Passenger Duty.
Some 250 chief executives have written to the chancellor George Osborne over the weekend, accusing the Treasury of ignoring evidence that APD is harming the economy, the Daily Telegraph reported.
APD, which applies to all passengers flying from a UK airport, will be raised again in April 2014.
“Year-on-year APD rises are making the UK economy increasingly uncompetitive,” the chief executives, including British Airways head Keith Williams and Heathrow boss Colin Matthews, wrote.
“As UK businesses, we are bitterly disappointed with the government’s decision to keep increasing a tax which acts as a barrier for business in attracting inward investment and creating new jobs.”
The business chiefs, who range from directors of large companies such as Emirates and Lufthansa, to small firms, point to research published by PwC earlier this year which claimed that scrapping APD would deliver a 0.45% boost to gross domestic product within 12 months and create 60,000 jobs by 2020.
“In the current economic climate it will be the private sector that drives growth, but taxes like APD are hindering us from competing internationally and slowing us down in the global race,” write the chief executives, who are members of the campaign group A Fair Tax on Flying.
An HM Treasury spokesman told the newspaper: “The government has frozen APD in real terms since 2010, and in the last year, APD has not changed at all for the majority of flights.
“Passenger numbers are going up, and airlines do not have to pass on the cost of APD to passengers.
“However, it is important that the aviation sector plays a part in helping to bring down the deficit.”