DUTY-FREE will be abolished on June 30 and no extension to the date will be granted, the European Commission has told the travel industry.
In a report eagerly awaited by cross-channel operators and airlines, the European Union made clear its determination to get rid of what it sees as a tax anomaly that bucks its policy of harmonising Europe’s duty rates.
The Duty-Free Confederation called the decision “narrow-minded” and “unbelievable”.
The Commission’s report estimates 50,000 travel and duty-free jobs across Europe – including 5,000 in the UK – will go following the abolition but proposes that financial state aids will help cushion the blow.
But the Confederation’s secretary-general Barry Goddard said: “Member states want jobs not subsidies. It is incredible for the Commission to suggest that taxpayers’ money should be used to try and offset the damage caused by the unnecessary loss of so many jobs.”
The Confederation, backed by prime minister Tony Blair and supported by France and Germany, has been battling for a five-year reprieve in order for a new system of taxation to be created across all member states.
The EU first announced its intention to abolish duty-free for travel between member states in November 1991 but the industry is angry that since that time nothing has been done to create a replacement system which could protect jobs and avoid the chaos of the traveller paying different duties across different countries.
A spokesman for the Confederation said: “The Commission has failed to come up with a replacement for duty-free despite the fact so many people will lose their jobs. It estimates 50,000 jobs will go and believe it’s a price worth paying which we find incredible.”
Confederation surveys conducted by the Centre for Economic and Business Research Ltd suggest higher potential unemployment figures – a loss of 16,772 travel and duty-free jobs in the UK and an overall European job loss of 83,507.