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The Smith Commission, set up by prime minister David Cameron in the wake of the vote against Scottish independence, has suggested that Air Passenger Duty be included as one of the taxes devolved to Scotland.
The commission said APD should be fully devolved as part of recommendations to give the Scottish parliament power to set tax rates and bands.
The recommendations will form the basis of draft legislation due to be published by January 25, with the main parties at Westminster pledging to take it forward, regardless of who wins the UK general election, in May 2015.
Dale Keller, chief executive of the Board of Airline Representatives UK, representing 74 airlines, said: “The Scottish Government has already indicated it would slash or scrap the world’s highest air passenger tax to stimulate the local economy.
“The right time is now for the whole of the UK to share equally in the benefits a phasing out of APD would deliver.”
British Air Transport Association chief executive Nathan Stower said: “We share the Scottish Government’s analysis that Air Passenger Duty – the world’s highest air passenger tax – acts as a barrier to trade, tourism and economic growth.
“APD across the UK should be phased out as quickly as possible, because the damage caused by this tax doesn’t stop at the Scottish border.”
Flybe chief executive Saad Hammad hoped that the Scottish administration will maintain its pledge to cut the tax and remove it completely in the longer term.
“The move would not only encourage airlines to provide new routes and enhance travel for Scotland’s passengers, but it would also significantly boost economic activity and connectivity for Scotland,” he said.
“The recommendations show progress and we believe that its implementation would demonstrate the benefits of cutting or abolishing the tax to other nations or regions within the UK, which in turn would deliver a balanced economic recovery.
“We remain hopeful that the Chancellor will announce further plans for APD reform in his autumn statement next week.”