07 December 2009

Future of Aviation report released by UK House of Commons Transport Committee

On 2 December 2009 the UK House of Commons ordered its Transport Committee report The future of aviation to be printed (see previous post).

One of the more interesting findings was:

127. Taxation is an aspect of aviation that is hotly disputed. The industry argues that it contributes heavily to the Treasury whilst critics say it should pay more. Yet it ought be relatively straightforward to provide a factual account. We asked for this, but did not receive one. It would be helpful if the Government clarified this issue with a statement of the revenues raised, the extent of any tax exemptions and how these compare to the social and environmental costs of aviation. As part of this clarification, the Government needs to explain the basis for its earlier statement that an additional £10 billion might be raised if VAT and fuel duty were applied to aviation."


"136. Although APD has been restructured to reflect the distance flown, and therefore—broadly speaking—CO2 emissions, the Government is clear that APD is not an environmental charge:

"[…] the Government emphasises that whilst its domestic aviation tax regime is structured so as to send environmental signals, neither APD nor AVGAS should be seen as an environmental charge designed solely to capture the environmental cost of aviation."

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