SCRAPPING the air passenger duty (APD) airport departure tax would boost the UK economy by at least £16 billion in the first three years, according to a report yesterday.
The abolition of the unpopular tax would result in almost 60,000 extra jobs in the UK in the long term, the report added.
Commissioned by four UK airlines including British Airways, the report said scrapping APD would pay for itself by increasing revenues from other sources such as income tax and VAT.
The boost to GDP (gross domestic product) would come from three main sources including extra investment by airlines to expand their networks and a net increase in inbound tourism.
The report from financial services company PricewaterhouseCoopers (PwC) said: “Abolishing APD has the potential to reduce the cost of flying, making it cheaper for businesses to maintain relationships with overseas customers. In this sense APD could be regarded as a tax on exports.
“APD is at least as damaging to the UK economy, and probably more so, than corporation tax or fuel duty.”
Introduced in 1994, APD has, since January 2007, increased by up to 260 per cent for short-haul flights and up to 360 per cent for long-haul ones.
Virgin Atlantic, Ryanair and easyJet were the other airlines for whom PwC prepared the report.
Responding to it the bosses of the four airlines said: “The report highlights the critical role that aviation plays as an engine of economic growth for both international commerce and tourism.
“It proves that APD is one of the three most destructive taxes, alongside corporation tax and fuel duty.
“The Chancellor has taken action on those two taxes in the Autumn Statement and we would encourage him to use the forthcoming Budget to remove APD to stimulate economic growth and create jobs.”