Link between new Scottish Air Departure Tax and tourist boost unclear

Passengers in airport
By Justine Riccomini, Head of Taxation (Scottish Taxes, Employment and ICAS Tax Community)

16 February 2017

The Scottish Government is committed to reducing the burden of Air Passenger Duty (APD) by 50% by the end of this parliament, replacing APD from April 2018 with a new devolved Air Departure Tax (ADT) in accordance with draft legislation published on 19 December 2016.

The main aims of the design and structure of ADT would be to boost Scotland’s connectivity internationally and help generate sustainable growth.

However, the draft legislation does not make it clear how these outcomes are to be assessed or to what extent the ADT will contribute to the outcomes, for example, when critically analysing viable links between increased passenger travel and ADT.  

Background to the Bill

The intention of the Air Departure Tax (Scotland) Bill is to charge a carriage tax on chargeable passengers on all chargeable flights that depart from Scotland, and because ADT is a devolved tax, Revenue Scotland is to be placed in charge of its collection from airline operators, and its management.

Call for evidence

The Scottish Parliament’s Finance and Constitution Committee issued a call for evidence on 13 January 2017 seeking feedback on the draft legislation, the Air Departure Tax (Scotland) Bill.

The Committee was interested in receiving feedback on:

  • How best to achieve the strategic and policy objectives which the Scottish Government have set for the Bill and whether these objectives are appropriate;
  • The extent to which the key concepts of the Bill with regard to the passengers and aircraft which will be subject to the tax are appropriate;
  • The appropriateness of the proposed structure for the tax;
  • The proposed administrative arrangements for the payment, collection and management of the tax; and
  • Any other issues which are considered relevant to the proposed tax.

ICAS’ submission can be read here.

Topics

  • Tax

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