Air tax - more tinkering than U turn

The Irish Government today published the Finance Bill which signs into law the announcements made in the recent Budget 2009. Since Budget Day there have been many criticisms of the effects that the proposed air travel tax would have on traffic to and from the country. Management of the airports West of the Shannon pointed out the inequitable nature of the tax, in particular the fact that those airports would bear a disproportionately higher level of taxation at €10 per passenger trip than passengers departing Dublin.

Whilst many expected a major revamp of the tax, the detail in today's Finance Bill won't satisfy many. 

The €2 tax will apply to travel from airports where the destination is 300km or less from Dublin Airport. €10 will apply to all other trips. An aircraft is defined as having twenty or more seats so executive aircraft will still be exempt, as will military  and Government flights.

An added burden on the airlines is that they must report passenger numbers monthly to the Revenue Commissioners and retain records for inspection. In addition the airlines are also responsible for collection and payment of the tax to Revenue. Under the finance Bill the Revenue Commissioners have the power to force an airline to post security for payments due, with ground handling agents shouldering the responsibility in the event of an airline defaulting on payment.

It is clear that the total cost per passenger will go far beyond the €2 or €10 per trip that will accrue to the Government coffers and that today's detail will do little to soften the impact of the tax as originally outlined.