The British Airports Authority (BAA) has called on the UK government to reduce Air Passenger Duty (APD), the tax on flights to and from the UK, which was increased last month.
BAA urged the government pointing to the Irish government's announcement earlier this week that it would cut its air travel tax by 70 percent from March 2011. Even though for a limited period, the reduction is expected to boost Ireland’s economy, which is in crisis, through tourism.
“The Irish recognize that aviation is fundamental to their recovery and this is very much something ministers in the UK need to take note of,” Nigel Milton, policy director at Heathrow airport, was quoted as saying in media.
In 2009, the Netherlands took off air tax completely. UK is now being urged to follow similar steps, if not remove tax completely, at least drop it to satisfactory levels. According to BAA, last month’s increase in APD has made air tax in UK highest in the world.
While the UK government had defended its move to increase APD stating that it was a chief contributor to the public finances that would help the government achieve its environmental goals, widespread opposition from travel firms and airways followed. Officials from British Airways feared the hike would badly affect the business in holiday season. Industry experts expressed that huge tax hikes would discourage long-haul travel and hinder the economies of various countries from the Caribbean, and Asia-Pacific where tourism makes significant contributions.