Consultation responses and analysis published
Responses and analysis to two consultations on plans to introduce a tax replacing Air Passenger Duty (APD) in Scotland have been published.
A majority of respondents to the policy consultation supported the Scottish Government’s strategic and policy objectives for improving Scotland’s air connectivity.
The Scottish Government will use the responses received to now take forward the preparation of its legislative proposals for the APD replacement tax, ahead of it coming into effect in Scotland from 1 April 2018.
Finance Secretary Derek Mackay 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.
“I’m pleased to have received so many responses to both consultations as throughout the whole process we have been consultative and collaborative, working with interest groups, from environmental bodies to airlines.
“This will now allow us to take the next step and begin the process of developing plans on how a Scottish replacement tax should be structured and operated to help boost Scotland’s international connectivity and economic competitiveness, while giving due consideration to environmental issues.
“Our plan, taking into account the responses to the consultations, will be to start reducing the overall burden of a new tax in Scotland from April 2018, implement a 50% reduction in full by the end of the current Scottish Parliament, and then abolish the tax entirely when public finances allow.
“This a fundamental component of our efforts to boost Scotland’s economy through improving international connectivity and generating sustainable growth.”
Over 160 responses were received to the consultations, which closed on 3 June 2016.
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 current Parliament. The tax will be abolished entirely when resources allow.
The consultation responses and analysis, as well as the original consultation documents, can be viewed at: https://consult.scotland.gov.uk/fiscal-responsibility/air-passenger-duty.
Under new powers being devolved by the Scotland Act 2016, the Scottish Parliament will have the power to legislate for a tax to replace APD in Scotland. As set out in paragraph 26 of the Fiscal Framework, the Scottish and UK Governments have agreed that the APD replacement tax will come into effect in Scotland from 1 April 2018.
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.