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Air Passenger Duty

Published: 14 Mar 2016 12:00
Part of:
Economy, Transport

Launch of consultation on plans to reform and reduce APD.

A consultation on plans to reform and reduce Air Passenger Duty (APD) in Scotland has been launched.

Powers to replace UK APD are due to be devolved to the Scottish Parliament under the Scotland Bill, implementing the recommendations of the Smith Commission.

The consultation, which is open for 12 weeks and closes on June 3, builds on the strong work of the APD stakeholder forum, which was set up last year by Deputy First Minister John Swinney and Infrastructure Secretary Keith Brown.

Views are being sought on how the reduction should be structured and how the tax should be operated to help boost Scotland's international connectivity and economic competitiveness.

The Scottish Government has committed to reducing the overall burden of APD by 50 per cent, with the reduction beginning in April 2018 and delivered in full by the end of the next Parliament.

The tax will be abolished entirely when resources allow.

A Strategic Environmental Assessment (SEA) Screening and Scoping Report has also been launched seeking views on the environmental issues that need to be considered.

Visiting Edinburgh Airport – Scotland's busiest airport – to launch the consultation plans, Deputy First Minister John Swinney said:

"UK APD is one of the most expensive taxes of its kind in the world. It continues to act as a barrier to Scotland's ability to secure new direct international routes and maintain existing ones.

"Our plan to begin reducing the overall burden of a new tax in Scotland by 50 per cent from April 2018, implement that reduction in full by the end of the next Scottish Parliament, and then abolish it entirely when public finances allow, is a fundamental component of our efforts to improve Scotland's international connectivity.

"Scotland is already an attractive destination for business and inbound tourism, and it is important that we continue to open Scotland up to key and emerging markets in order to further capitalise on the opportunities that exist.

"We want to be consultative and collaborative as we have been with the new fiscal levers already devolved to Scotland. This policy consultation allow us to take the next step and begin the process of developing a new approach that helps deliver our objective of sustainable economic growth.

"It is also a further example of the Scottish Government moving ahead with pace and purpose to ensure we are ready to use Scotland's new additional powers as soon as possible after they have been devolved."

Edinburgh Airport's Chief Executive Gordon Dewar added:

"We warmly welcome the Scottish Government's well documented position that Air Passenger Duty (APD) is a regressive tax that hampers growth.

"We are of course delighted to welcome Mr Swinney and it is great that the Scottish Government has chosen to launch this consultation paper here at Scotland's busiest airport.

"Edinburgh Airport will continue to make the case and highlight the benefits of a 50 per cent cut to APD in one move in April 2018."

Liz Cameron OBE, Director/Chief Executive of the Scottish Chambers of Commerce, added:

"We have been asking for the abolition of this tax for some time - it is a tax on connectivity and a barrier to international trade. The Government has committed to reducing APD by 50% by 2021.

"However, let's consider the feasibility of implementing this reduction earlier. This would really boost tourism and our exporting competitiveness.

"We would urge as many businesses and individuals as possible to take part in this consultation calling for the government to reduce it as a priority supporting the creation of even more jobs".

Notes to editors

The Air Passenger Duty consultation and Strategic Environmental Assessment (SEA) Screening and Scoping Report can be viewed at https://consult.scotland.gov.uk/fiscal-responsibility/air-passenger-duty

The Smith Commission Report recommended that powers over APD should be devolved to the Scottish Parliament. That proposal, and others contained in the Report, is the subject of the Scotland Bill which is currently being considered at Westminster.

The Scottish Government established a stakeholder forum - involving a broad range of sectors including airlines, airports, business representatives, tax accountancy and legal professional bodies and environmental organisations – in August 2015 to provide expert input to the preparation of policy proposals for a new tax replacing APD in Scotland.

Papers and notes of all forum meetings, as well as the current terms of reference, are available at: http://www.gov.scot/Topics/Government/Finance/scottishapproach/airpassengerduty/APDstakeholderforum