Pat Breen (Clare, Fine Gael)
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Question 166: To ask the Minister for Finance if there are plans to review the introduction of the air travel tax; and if he will make a statement on the matter. [5150/09]

Pat Breen (Clare, Fine Gael)
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Question 175: To ask the Minister for Finance further to Parliamentary Question No. 205 of 11 November 2008, if he has plans to review the air travel tax in view of the announcement by a company (details supplied) to reduce its services at Shannon Airport; and if he will make a statement on the matter. [5149/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 166 and 175 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 (No. 2) Act 2008 confirms 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 will apply 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 will be subject to the €2 rate. We currently face significant financial challenges and the air travel tax is an important revenue raising measure.

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.

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. should not 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 is a sector that already has considerable preferential treatment. I have no plans to review the air travel tax.