Written answers

Wednesday, 13 May 2009

9:00 pm

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Question 105: To ask the Minister for Finance if he has had contacts from airline operators, aviation stakeholders or other stakeholders in the wider travel and tourism industry in relation to the impact of the new €10 departure tax on the aviation and airline industries; if he is reviewing the operation of the new €10 departure tax; and if he will make a statement on the matter. [13677/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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As the Deputy is aware, I announced in Budget 2009 that an air travel tax would come into force in respect of passengers departing from Irish airports on and from 30 March 2009. A general rate of €10 per passenger would 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 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.

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. Other countries within the EU apply similar taxes including, the UK and France, 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. 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 last 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. I have no plans to review the air travel tax.

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