Phoney tax argument from aviation industry

28th May, 2008

Almost every national newspaper and all the national environmental organisations have pointed out that aviation benefits from huge tax concessions. To attempt to refute that case, BAA published a report by Volterra Consulting in Nov 2003. 

In his covering letter, then BAA Chief Executive Mike Clasper, claimed that “aviation is the only mode of transport making a significant contribution to public funds.” This is not true – road transport contributes £38 billion a year (after paying for road building and road maintenance), whereas aviation pays only £0.85 billion.

The report is equally off track. It does not address the key question of whether air travel should be taxed at a similar rate to car travel, and merely describes aviation as ‘public transport’ which should be taxed at a low rate. No attempt is made to justify that claim.

Most people would accept that there are good social, economic and environmental reason for not taxing and, indeed, subsidising local public transport. But these reasons d not apply to air travel.

See briefing which rebutts the BAA/Volterra argument.  This briefing is as relevant now (May 2008) as when written (Dec 2003).