UK’s ‘sky high’ tax on flying bottom of world league table
May 6th, 2015
136 countries are more competitive than the UK when it comes to air ticket taxes and airport charges according to the World Economic Forum’s biennial Travel and Tourism Competitiveness Report published today.
The UK is ranked 137th out of 138 countries in the WEF’s global Travel & Tourism Competitiveness Index, with just Chad below propping up the table. Britain trails behind European competitors such as Sweden (26th), Spain (55th), Italy (83rd), Germany (110th) and France (114th). Countries outside of Europe that are actively encouraging the development of their aviation sectors rank highly, including Qatar (12th), India (16th), Turkey (22nd), United Arab Emirates (25th) and China (38th).
The UK has such a low ranking because most countries do not tax air travel or do so at significantly lower rates. Figures released last week by HMRC showed that passengers paid £3.17 billion in Air Passenger Duty (APD) in 2014-15. Germany has the next highest tax in Europe, but its Aviation Tax raised just £745m in 2014. More than 20 EU countries do not have an equivalent tax on flying.
The Office for Budget Responsibility estimates that the tax take from APD will increase by a further £500 million during the next Parliament. Passengers will be paying £3.7bn a year by 2019/20.
Nathan Stower, Chief Executive of the British Air Transport Association, said:
“We knew UK Air Passenger Duty is sky high compared with our competitors in Europe. We know now that it is one of the least competitive taxes in the world. The next government should end this damaging tax on trade, tourism and families and abolish APD in the new Parliament.”
Commenting on the World Economic Forum’s findings, Carolyn McCall, Chief Executive of easyJet, said:
“The World Economic Forum rankings show that the UK is in the top five of countries with the highest aviation taxes in the world. This is further proof that APD is a tax that is making the UK less competitive, with a negative impact on UK tourism, investment and business activity.
“Abolishing APD would boost the UK economy and pay for itself by increasing revenues from other sources. Research by PwC has revealed that the GDP boost to the UK economy would amount to at least £17 billion in the first three years and result in almost 60,000 extra jobs in the UK over the longer term.”
Craig Kreeger, Chief Executive of Virgin Atlantic, said:
“This report highlights once again the damaging impact of Air Passenger Duty. Politicians from all parties are keen to claim that the UK is “open for business”, and yet we rank almost last on such an important measure of economic competitiveness.
“APD is a tax on exports – whether it’s on inbound tourism or business travellers – and the UK’s overall high rank in the report highlights what a disproportionate impact APD is having. Moving the UK up the international competitiveness rankings should be amongst the top priorities for any incoming Government.”
6th May 2015