Brian Hayes
Question:96 Deputy Brian Hayes asked the Minister for Finance his views on whether the airport travel tax has been a disaster for tourism here; and if he will make a statement on the matter. [47377/09]
View answerWednesday, 16 December 2009
Questions (91, 92)
Written answers
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 300kms 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 to applying a tax on air travel. Other countries within the EU apply similar taxes such as the UK and France, 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 to 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 etc. should have only a limited effect on tourist 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 are 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 have also experienced broadly similar declines. This is not a desirable situation, but 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 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.
John Deasy
Question:97 Deputy John Deasy asked the Minister for Finance his plans regarding public transport providers paying the proposed carbon tax; his further plans to provide a rebate of the tax to such companies; and if he will make a statement on the matter. [47203/09]
View answerI announced in the Budget that exemptions from the carbon tax will apply only to participants in the EU Emissions Trading Scheme (ETS) in respect of fuels covered. There is scope under the Energy Tax Directive to apply a lower rate of excise duty on auto-diesel in respect of certain local public passenger transport services and certain other commercial users, once the EU minimum rate is observed. However, the introduction of any such preferential treatment would require an extensive rebate system. It is estimated that a relief from carbon tax for local public passenger transport services using the same criteria as the previous excise duty rebate would cost in the region of €5m per annum. However, using the same criteria would not be possible under EU law and any relief would need to be wider in scope, but would also exclude some of those companies that had benefited from the previous excise relief scheme. It is estimated that a general carbon tax relief for commercial users of auto-diesel would cost the Exchequer approximately €70m per annum.