Fergus O'Dowd (Louth, Fine Gael)
Link to this: Individually | In context

Question 30: To ask the Minister for Finance if he will revisit the €10 and €2 exit tax to ensure that no airport has a comparative advantage over another due to Government policy; and if he will make a statement on the matter. [39969/08]

Tommy Broughan (Dublin North East, Labour)
Link to this: Individually | In context

Question 40: To ask the Minister for Finance if he has held discussions with the Department of Finance on the operation of the new €10 air travel tax which will operate for airports here; the person who will collect the tax from departing passengers; if his Department undertook an analysis of the potential impact on volumes of airline passengers were a new airline tax to be introduced; the reason the owners of private jets with less than twenty seats will be exempt from the tax; if he will review the operation of the €10 air tax from Galway, Shannon, Ireland West, Cork and Kerry Airports in view of the higher tax that passengers from those airports will face when travelling to major UK destinations; if his attention has been drawn to the comments made by the chief executive officer of Galway Airport and of Ryanair regarding the impact on the aviation industry of the proposed new €10 air travel tax; and if he will make a statement on the matter. [40065/08]

Olivia Mitchell (Dublin South, Fine Gael)
Link to this: Individually | In context

Question 45: To ask the Minister for Finance his views on the impact of the €10 departure tax on the outcome of tourism policy here in view of the fact that it will increase the costs on tourists visiting; the discussions that he has had with the Department of Arts, Sport and Tourism and the Department of Transport on the impact of a departure tax in terms of the effect that it will have on the numbers of tourists that will visit here; and if he will make a statement on the matter. [41831/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I propose to take Questions Nos. 30, 40 and 45 together.

I announced in Budget 2009 that an air travel tax will come into force in respect of passengers departing from Irish airports on and from 30 March 2009. A general rate of €10 per passenger will apply, with a lower rate of €2 for shorter journeys.

The Finance Bill confirms the introduction of an air travel tax from 30 March 2009. However, I have taken account of concerns raised by the regional airports particularly those on the western seaboard. The lower rate of €2 will apply to departures from any Irish airport where the destination is 300kms or less from Dublin airport. This means that all Irish departures to locations such as Manchester, Liverpool and Glasgow will be subject to the €2 rate. The airlines will be the liable persons for the tax, including paying it to Revenue.

Ireland is not unique in regard to applying a tax on air travel. A number of countries within the EU apply similar taxes including, the UK, France and the Netherlands, as do Australia and New Zealand. The proposed rates for the Irish air travel tax are not unreasonable both for shorter and longer journeys, when compared to rates in other countries.

Aircraft with less than 20 passenger seats are exempt from the air travel tax. This is a practical arrangement towards the operation of the tax. The cost of collecting the tax in respect of small aircraft would be high relative to the amounts of tax collected in respect of such aircraft. It also ensures that passengers travelling to and from the Irish islands are exempt from the tax, as the aircraft used on those services have less than 20 passenger seats. I would point out that the UK, France and the Netherlands all have arrangements in place that result in their air travel taxes effectively not applying to small aircraft.

It should be recognised that tourists will only be 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 etc. shouldn't have much of an effect on tourist numbers. I appreciate the airline industry continues to go through a difficult period. However, this difficult trading period has, in addition to weak world economic activity, been largely driven by a massive spike in oil prices. Oil prices have now halved from the all-time high prices experienced earlier in the year.

I tried to be as fair as possible in looking at areas for additional tax revenues. It is also worth noting that fuel used by commercial airlines is completely exempt from tax, so it's a sector that already has considerable preferential treatment.