Belfast Telegraph

Analyse cost and benefits of new Air Departure Tax, Scottish Government urged

A think tank has called on the Scottish Government to analyse the cost and benefits of replacing air passenger duty (APD) and to scrap the tax entirely if it is found to be more economically beneficial.

Reform Scotland said the draft legislation for the new Air Departure Tax (ADT), which will be introduced in April next year, fails to set out who will pay and what rate will be paid.

The Scottish Government wants to cut APD by 50% by the end of this Parliament.

Ministers hope reducing the levy, and eventually abolishing it, will increase the number of direct flights to and from Scotland.

In a written submission to Holyrood's Finance and Constitution Committee, Reform Scotland said ADT as currently drafted would apply to children because exemptions have not been set out, unlike in other primary legislation.

Reform Scotland's research director Alison Payne said: "Although Reform Scotland has backed the Scottish Government's aim of cutting then scrapping APD, we cannot support this Bill.

"The Scottish Government gave a commitment to cutting the level of APD by 50%. This was a manifesto commitment from the SNP, yet that commitment is not reflected in the legislation as drafted.

"Reform Scotland does not believe that legislation dealing with the creation of a new tax, or any tax, can simply ignore the issue of who will pay and what they will pay, as this legislation does. It is not transparent, nor is it accountable, to simply state that they 'will be delivered at a later date'.

"Reform Scotland is calling on the Scottish Government to use the 14 months prior to APD being disapplied in Scotland to perform a full cost-benefit analysis to ascertain the effect on the overall tax take of the new ADT.

"If that modelling shows a projected increase in the tax take, then it can be implemented as planned. However if, as we expect, the modelling shows that it would be more economically beneficial to scrap the tax entirely, then the only responsible decision for the Government to make would be to not implement the new tax."

A Scottish Government spokeswoman said more detail on tax exemptions, bands and rates would be given well in advance of the ADT being introduced.

She said: "UK APD has been the most expensive tax of its kind in Europe and continues to act as a barrier to Scotland's ability to secure new direct international services and maintain existing ones.

"Our plan to cut Air Departure Tax by 50% by the end of the Parliament, and then abolish it when public finances permit, is a fundamental component to improving Scotland's international connectivity, which is particularly important in light of the economic uncertainty caused by the outcome of the EU referendum."