Dáil Éireann debate -
Thursday, 11 Dec 1997

Vol. 485 No. 1

Written Answers. - Travel Tax.

Noel Ahern

Question:

73 Mr. N. Ahern asked the Minister for Finance the annual income from the £5 travel tax; to whom this tax applies; if it is only charged against travel tickets purchased in this State; if tourists from abroad must pay it leaving our shores; the way in which it differs from the United Kingdom equivalent tax which is levied against all, including Irish tourists returning from the United Kingdom; and if he will make a statement on the matter. [22533/97]

Minister for Finance (Mr. McCreevy)

I am informed by the Revenue Commissioners that the income from foreign travel duty, i.e. travel tax for 1996, the last full year for which figures are available, was £12,315,080. The breakdown of this figure was £10,923,720 from air travel and £1,391,360 from sea travel. The corresponding figures for the first ten months of 1997 are £9,979,955 from air travel and £1,146,265 from sea travel, making a total of £11,126,220.

The tax imposed by section 65 (2) of the Finance Act, 1982, is charged on "each and every passenger ticket relating wholly or partly to carriage by a ship or an aircraft on a voyage or a flight, as the case may be, commencing in the State to a destination, other than Northern Ireland, outside the State".

By virtue of section 74 (2) of the Finance Act, 1984 a passenger ticket within the meaning of the above definition received in the State on or after the 26 January 1984 shall —"notwithstanding that it was sent or brought to the State from outside the State, be deemed, for the purpose of the said section 65, to have been issued in the State and to have been so issued on the date on which it was sent or brought into the State".

The tax is payable by carriers. The legal definition of "carrier" contained in section 65 (1) of the Finance Act, 1982, is: a person being a person who performs the carriage of persons by ship or aircraft who as a principal makes an agreement for the carriage of a person by ship or by aircraft either with the person to be so carried or with a person not being a person who performs the carriage of persons by ship or by aircraft acting on the latter's behalf.

The effect of the 1984 amendment was to establish that travel tax is now levied on all chargeable tickets issued both in the State and abroad for travel commencing in the State to a place, other than Northern Ireland, outside the State.

The tax is not, however, chargeable on travel which commences outside the State — most tourists would fall into this category. Therefore, carriers who carry passengers into the State and then take them to place outside the State as part of the same journey or who return them to their place of departure on a return ticket, are not liable to travel tax in Ireland. They may, or course, have liability to similar taxes in other countries in respect of such journeys.

I do not, of course, have any responsibilities concerning taxes applied by other jurisdictions to travellers, nor is it my function to comment on them. However, for the information of the Deputy, "Air Passenger Duty" in the United Kingdom applies to both domestic and foreign travel by air. It does not apply to travel by sea. In the particular context of the question put by the Deputy three main differences appear to be: the UK tax applies to both domestic and foreign air travel; the Irish tax applies only to travel commencing in the State, whereas the UK tax, subject to some exceptions such as connecting flights, can apply to the return leg of a journey by air, the outward leg of which commenced outside the United Kingdom; and the UK applies a higher rate of tax to non-EU travel than to EU and domestic travel.