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Air Passenger Duty: Government rejects changes to aviation tax

The controversial banding system used to calculate the rate of Air Passenger Duty (APD) paid by travellers is to remain in place, despite strong opposition from airlines, travel operators and tourist boards.

The cost of flying will increase again in 2012 Photo: ALAMY

By Oliver Smith
Adapted

Air Passenger carrier

After several months of consultations with representatives of the travel industry, the Government today rejected all proposed changes to the way the tax is calculated. It also declared that those passengers flying in premium economy would continue to pay the same rate as those travelling in first class.

Last week the Government confirmed that APD would rise by around eight per cent from next April, but delayed publishing its final conclusions on the future of the tax until today.

A statement issued on behalf of Carolyn McCall, Willie Walsh, Michael O’Leary and Steve Ridgeway, chief executives of EasyJet, IAG, Ryanair and Virgin Atlantic, respectively, described the consultations as a “sham” and a “waste of taxpayers’ money”.

“We are left with a tax that has already cost 25,000 jobs, is doing increasing damage to the prospects for economic recovery and sends a message to the world that Britain is a difficult and expensive place to do business,” the statement said.

Prime Minister John Key said: “With the tax for New Zealand-bound passengers set at four or five times the costs of offsetting the carbon emissions produced, this logic is without basis.”

“The British Government’s announcement overnight maintains this cost difference, and ignores the fact that environmental concerns about emissions are being addressed through the European Union’s extension of its Emissions Trading Scheme (ETS) to aviation emissions.

“That puts a levy on airlines – meaning there is no justification for an additional duty on air passengers which discriminates on the basis of distance.”

Mr Key said the New Zealand Government had been hopeful that the British Government had been persuaded not to proceed with an increased APD that discriminated unfairly against Australia, New Zealand, the Caribbean, Singapore, South Africa and a few others.

 

 

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A Moment with the Registrar of Lands

The controversial banding system used to calculate the rate of Air Passenger Duty (APD) paid by travellers is to remain in place, despite strong opposition from airlines, travel operators and tourist boards.

The cost of flying will increase again in 2012 Photo: ALAMY

By Oliver Smith
Adapted

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Air Passenger carrier

After several months of consultations with representatives of the travel industry, the Government today rejected all proposed changes to the way the tax is calculated. It also declared that those passengers flying in premium economy would continue to pay the same rate as those travelling in first class.

Last week the Government confirmed that APD would rise by around eight per cent from next April, but delayed publishing its final conclusions on the future of the tax until today.

A statement issued on behalf of Carolyn McCall, Willie Walsh, Michael O’Leary and Steve Ridgeway, chief executives of EasyJet, IAG, Ryanair and Virgin Atlantic, respectively, described the consultations as a “sham” and a “waste of taxpayers’ money”.

“We are left with a tax that has already cost 25,000 jobs, is doing increasing damage to the prospects for economic recovery and sends a message to the world that Britain is a difficult and expensive place to do business,” the statement said.

Prime Minister John Key said: “With the tax for New Zealand-bound passengers set at four or five times the costs of offsetting the carbon emissions produced, this logic is without basis.”

“The British Government’s announcement overnight maintains this cost difference, and ignores the fact that environmental concerns about emissions are being addressed through the European Union’s extension of its Emissions Trading Scheme (ETS) to aviation emissions.

“That puts a levy on airlines – meaning there is no justification for an additional duty on air passengers which discriminates on the basis of distance.”

Mr Key said the New Zealand Government had been hopeful that the British Government had been persuaded not to proceed with an increased APD that discriminated unfairly against Australia, New Zealand, the Caribbean, Singapore, South Africa and a few others.