ANTOR News

CHANCELLOR’S “ONEROUS TOURISM TAX” HITTING DEVELOPING COUNTRIES

29 November 2011

ANTOR (Association of National Tourist Offices and Representatives)

The Government’s plans for a double-inflation rise in Air Passenger Duty (APD) “will create serious consequences” and will “hit the income that developing countries can receive from developing quality tourism” according to more than 50 of the world’s tourist offices who wrote to the Chancellor. 

In an unprecedented move, on the eve of the Chancellor’s Autumn Statement, the 53 tourist offices sent a strongly-worded petition to George Osborne calling on the Government to reform the UK’s Air Passenger Duty – which is the highest anywhere in the world. The Government is widely exepected to anounce a further rise in the UK’s Air Passenger Duty as part of the Autumn Statement. 
 
The tourist offices say that the “onerous” tax will “be felt by the international destinations that the UK has close links with” and urge the Chancellor to consider the wider impact of Government policy-making – on both the UK economy, that they say will be a “net loser” from any increases, and “those economies who are heavily dependent on UK tourism” that they say will also lose out. 
 
The tourist offices have also made individual representations to the Treasury. 
The Bahamas Tourist Office says, “Tourism is 70 per cent of our GDP and in the current economic situation any further increase to the cost of a holiday will decrease the number of visitors to the islands – negatively effecting the economy of the Bahamas such as the unemployment level and services financed by the Government through tourism revenue.” 
Sabrina Cambiasos, Direcor of the Dominican Republic Tourist Board, says, “APD has already had a devastating effect on the Dominican Republic’s APD. Increasing APD would cause even more damage. UK holidaymakers and the friends and relatives of Caribbean nationals who live in Britain are being heavily penalised.”
Khaled Rhamy from the Egyptian State Tourist Office says, “Egypt is particularly adversely affected.”
 
Tracey Poggio, the Chair of the Association of National Tourist Offices and Representatives (ANTOR) described Air Passenger Duty as an “onerous tourism tax” and urged the Chancellor to “consider APD in the round – looking at the wider impact of the tax on the UK economy but also on the impact that it has on deterring UK holiday-makers from travelling overseas”. She also implored British politicians to take a more holistic view of aviatin tax: 
 
“It is clear from our 53 tourist office members that the UK’s stringent APD is having a direct effect on many destinations. British passengers are being priced out of the skies. This is bad for British holiday-makers but we’re also seeing knock-on effects on many destinations where 1000s of peoples’ livliehoods depend on British tourism. It is not an argument that is heard in Westminster, and we need to remind MPs that their decisions are having devastating effects on communities that are suffering from a downturn in outbound tourism from the UK.” 
 
Tracey Poggio went onto say that the tourist offices based on the UK are also suffering: 
“The total annual revenue contribution to the United Kingdom taxpayer of tourist boards here in the UK is approaching £100 million. But they will have little choice but to defer their marketing efforts to other countries that offer growth prospects for the future. Many tourist boards are downsizing their offices in the UK, such as Mexico and Italy, or even starting to close them like Brazil and Lithuania. The affects of APD have to be contributing factors.”
 
The petition also says: 
Under the guise of environmental protection, Air Passenger Duty has multiplied in record time, 140% since 2007. 
There still remains no evidence to support its benefit as a green tax.  
We are concerned that Governments have used APD as a revenue raising tool as the public remain largely unaware of how much tax they are paying. 
We are concerned that there has been no independent study by Government into the effects of APD on international travel and the effects it is having on the effects of destination economies overseas. 
The impact of the proposed double inflation increases in 2012, will seriously weaken the UK public’s choice to travel abroad and for international communities established in the United Kingdom, from travelling to and from Britain
 
Background on Air Passenger Duty: 
The overall APD tax take is due to increase significantly by April 2012, if the Chancellor implements his ‘double inflation’ APD increase.
The overall, or ‘quantum’, tax take is also due to increase when the UK enters the EU Emissions Trading Scheme (ETS) in 2012. Many EU countries are phasing out their versions of air passenger duty to compensate for the revenue to be raised by the EU ETS. 
The UK’s top - or ‘Standard’ rate - is some 8.5 times the average of other countries in Europe which still levy a charge. 
Since 2007, APD for short-haul routes has increased by 140% to EU countries, and for long-haul routes by up to 325%.
Currently, a typical British family of four travelling in economy class pays £240 more than most European countries to fly to the USA and almost £50 more to fly to Europe.  
More than 17,000 people have already written to their MP calling on the Government to scraps its plans for a double-inflation rise in APD. 
A recent ComRes poll found that 75% of MPs believe that ‘further rises in aviation taxation may price some people out of flying’.
In September 2011, 20 cross-party MPs and peers wrote to the Chancellor urging him to re-think his plans. 
By the Department for Transport’s own figures, aviation taxes exceed the sector’s environmental costs by over half a billion pounds every year.  
Many European countries including Belgium, Holland and Denmark have abandoned their aviation taxes, due to the negative effects on their economies. In the longer-term, analysis shows that the UK economy will forego £750m of wealth and 18,000 jobs due to the recent rises in APD (November 2010), with  around half the extra revenue raised offset by tax revenue losses in the wider economy (source Oxera, 2009) 
 
For further information contact: 
Alison Cryer, 
Executive Secretary, 
ANTOR
11 Blades Court, 121 Deodar Rd, 
London SW15 2NU
Tel: 0870 241 9084 
Email: secretariat@antor.com 
www.antor.com
 
ENDS
 
Notes to Editors:
 
Association of National Tour Office Representatives (ANTOR)
ANTOR is the principal lobbying organisation for the world's tourist offices. Its UK membership comprises national and regional tourist offices which are represented in Britain. ANTOR's objectives include providing a fraternal forum for its members to meet and exchange ideas, to forge close relationships with all other sectors of the travel industry; to be recognised as one of the foremost advocates of responsible tourism and to comment on a wide range of issues affecting worldwide travel and tourism. ANTOR UK is a voluntary, non-political organisation which was established in 1952. It is run by a Board of members which is elected each year at the Association's Annual General Meeting.
 
ANTOR Petition text: 
A.N.T.O.R. Members Unite Against Air Passenger Duty Increases
 
Under the guise of environmental protection, Air Passenger Duty has multiplied in record time, 140% since 2007. There still remains no evidence to support its benefit as a green tax.  We note that the Coalition Government has stated that it now regards APD as a revenue raising tax alone. We welcome plans by the Treasury to reform the tax and call for it to be structured in a fairer way that means fying can be affordable for Britons travelling abroad and for visitors to visit the UK for business or pleasure.
 
We believe that APD is already impeding travel to destinations of choice. We are concerned that Governments over the past twenty years have used APD as a revenue raising tool as the public remain largely unaware of how much tax they are paying. We are concerned that there has been no independent study by Government into the effects of APD on international travel and the effects it is having on the effects of destination economies overseas. 
 
We believe Air Passenger Duty in its current form is unfair to individuals and to business. The impact of the proposed double inflation increases in 2012, will seriously weaken the UK public’s choice to travel abroad and for international communities established in the United Kingdom, from travelling to and from Britain, for both business and social needs. We believe the UK economy will be a net loser from these tax hikes but that the impacts will also be felt by the international destinations that the UK has close links with that we represent.
 
We are concerned that higher and higher APD rates combined with economic difficulties presented by the global economic downturn will create serious consequences not only for the UK economy but also for those economies who are heavily dependent on UK tourism.
 
We believe that APD is unfair because it hits the income that developing countries can receive from developing quality tourism propositions. We believe the tax is onerous because it is disproportionately large, compared to similar charges of countries within the European Union.
 
The Association of National Tourist Offices and Representatives (ANTOR) with global representation in the United Kingdom, and a total annual revenue contribution to the United Kingdom taxpayer approaching £100 million, is part of the Fair Tax On Flying Campaign and calls for the Chancellor, in reforming APD, to make the tax fairer. 
 
Air Passenger Duty – additional information: 
The current rates of tax, following substantial increases in November 2009 and 2010, are:
Band A 0–2,000 miles from London - Economy Rate - £12 Premium Rate - £24
Band B 2,001–4,000 miles from London - Economy Rate -£60 Premium Rate- £120
Band C 4,001–6,000 miles from London - Economy Rate - £75 Premium Rate - £150
Band D over 6,000 miles from London -Economy Rate - £85 Premium Rate - £170
Only four other European countries levy some form of air passenger tax.
Denmark, Norway, Malta and Holland have all scrapped similar taxes as the revenue raised was outweighed by the damage caused to their economies. 
 
List of ANTOR members: ABU DHABI, ALASKA, AUSTRIA, BAHAMAS, BARBADOS, BELGIUM - BRUSSELS & WALLONIA, BRAZIL, BRITISH VIRGIN ISLANDS, CANADA, CATALONIA, CROATIA, CYPRUS, CZECH REPUBLIC, DENMARK (GREENLAND & THE FAROE ISLANDS), DOMINICAN REPUBLIC, EGYPT, FIJI, FINLAND, GERMANY, GIBRALTAR, GREECE, HONG KONG, HUNGARY, INDIA, ITALY, JAPAN, JERSEY, JORDAN, KENYA, KOREA, LITHUANIA, MACAU, MALAYSIA, MALTA, MEXICO, MOROCCO, NETHERLANDS, NORWAY, OMAN, THE SULTANATE OF OMAN, POLAND, QUEBEC, ROMANIA, SAMOA, SOUTH AFRICA, SPAIN, ST LUCIA, SWITZERLAND, TAIWAN, TRINIDAD & TOBAGO, TUNISIA, TURKEY, UNITED KINGDOM [HONORARY MEMBER]
 

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