Richard Bruton (Dublin North Central, Fine Gael)
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Question 5: To ask the Minister for Finance the latest estimate of the revenue to be earned from the air travel tax; his assessment of its impact on foreign visitors; and if he will make a statement on the matter. [45481/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners that the air travel tax arising from travel undertaken in any month is payable by airline operators by the 23rd of the following month. The yield from the air travel tax received in the period from May to November 2009, in respect of travel undertaken during the months April to October 2009 is €76.9 million. It is estimated that the air travel tax will yield approximately €125 million in a full year.

The Finance (No.2) Act 2008 confirmed the introduction of an air travel tax from 30 March 2009. However, I took account of concerns raised by the regional airports, particularly those on the western seaboard. The lower rate of €2 applies to departures from any Irish airport where the destination is 300 km or less from Dublin airport. This means that all Irish departures to locations such as Manchester, Liverpool and Glasgow are subject to the €2 rate.

Ireland is not unique in regard in applying a tax on air travel. Other countries within the EU, such as the United Kingdom and France, apply similar taxes, as do Australia and New Zealand. The rates for the Irish air travel tax are not unreasonable, both for shorter and longer journeys, when compared with rates in other countries. It should be recognised that tourists are only subject to the tax on their return journey. The additional €10 or €2 in the context of a much larger purchasing decision involving travel, hotel expenditures and so on should have only a limited effect on tourism numbers. The Government appreciates the airline industry continues to go through a difficult period. However, this difficult trading period arises primarily from weak world economic activity.

It should be noted that at present, the decline in air travel is an international phenomenon and as a result aviation services are contracting on a global basis. In the case of Ireland, the decline in passenger numbers through our airports is broadly in line with our international counterparts. This downward trend is evident for periods prior to the introduction of the air travel tax. Furthermore, passenger numbers for other modes of transport also have experienced broadly similar declines. While this is not a desirable position, it is clear that the air travel tax is not the substantive cause for the decline in passenger numbers.

We currently face significant financial challenges and the air travel tax is an important revenue-raising measure. The Government has tried to be as fair as possible in considering areas for additional tax revenues. It is worth noting that as fuel used by commercial airlines is completely exempt from tax, this is a sector that already has considerable preferential treatment.

Richard Bruton (Dublin North Central, Fine Gael)
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Is the Minister aware that the number of visitors to Ireland has fallen by approximately 700,000 since the introduction of the air travel tax? Contrary to what the Minister suggests, the information I have seen demonstrates that Ireland has moved from being one of the fastest growing destinations to now being among those worst hit by the reversal. Has the Minister had sight of the study that was carried out, admittedly by a vested interest? This analysis suggested that the impact of this tax on the tourism sector has been €500 million, compared with the hoped-for revenue of €125 million. For a country like Ireland, which seeks to trade its way out of this recession, does the Minister not agree that handicapping the tourism sector is particularly short sighted?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I do not accept the premise that led the Deputy to the conclusion that the air travel tax led to the decline in Irish visitor numbers. I do not accept it because it is not in accordance with the international data. What is happening in Ireland is happening in every other country. There is a decline in passenger numbers but it is not caused by the air travel tax. Many other countries have such taxes and there is no correlation between the presence of an air travel tax and the number of passengers in a given country.

Richard Bruton (Dublin North Central, Fine Gael)
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Is the Minister aware the Belgian, Dutch, Greek and Spanish Governments all have removed such taxes in an effort to try to stimulate their respective tourism sectors? Furthermore, is he aware that many Irish airlines are moving their aircraft out of Ireland to other destinations to achieve cheaper onward movement? As the Minister is aware, even Aer Lingus is doing this and effectively is offshoring its aircraft. Does it not constitute a serious development for a country that seeks to make its living from tourism to find its own aircraft being offshored to avail of better conditions in other markets? Surely this matter deserves some attention from the Government.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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It is not my practice to divulge details of budgetary decisions in advance of the budget and I drew attention in my reply to various general considerations that apply to this area. I reiterate that I do not accept that the various different considerations to which Deputy Bruton referred do not stem from the travel tax, but from other commercial considerations that obtain in airlines, as well as from the general decline in world passenger numbers.