March 3, 2011
The UK’s travel and tourism industry has launched today (3rd March) a campaign called ‘Fair tax on flying’. The actual aim is to stop a planned – and fully justified – rise in aviation taxes.
The campaign says “This year £2.2 billion of holidaymakers’ and business travellers’ money will pour into the Treasury’s coffers,” a campaign spokesman said. .. “The government has stated that it intends to raise the tax by a further £1.4 billion by 2015.”
What the campaigners do not say is that aviation presently enjoys huge tax advantages compared with most sectors to the economy. These are estimated at about £10 billion pa. If these taxes were paid, some quarter of the planned cuts to public services would not be needed.
The proposed increase to £3.6 billion is still a long way short of a fair value of £10 billion. Because aviation taxes are relatively low, they distort economy. Because fares are artificially cheap, they contribute to the massive trade deficit on tourism. And because aviation is mainly the preserve of the better-off, the low taxes are regressive.
AEF would support a ‘fair tax on flying’ of around £10 billion pa.