Stimulating more economic activity and jobs by creating the right regulatory environment, removing unreasonable taxes. Aviation taxes cost European countries jobs and economic growth. They punish customers hindering tourism and trade.
Taxation of air travel in Europe should not be a government cash cow. Experience and economic analysis both show that removing taxes would boost the countries’ economy and job creation, e.g. the Dutch government’s removal of its ticket tax in 2009 led to strong growth in passengers; the Irish government’s removal of traffic tax in April 2014 led to extensive traffic growth at Irish airports and an 8% increase in tourism last year; economic analysis by PwC shows removing UK Air Passenger Duty (APD) would boost British GDP by 1.7 per cent and create 60,000 new jobs by 2020.
These measures have a direct and harmful effect on air traffic and passenger numbers. By weakening an enabler of economic activity, governments are shooting themselves in the foot: they only see the short-term budgetary gains but ignore the larger and long-term impact on economic activity.
The focus must be on concrete and measurable actions that support European airlines and their customers by providing more flights and lower fares. By removing aviation taxes the governments would end up net beneficiaries due to the increased take from VAT and other taxes would go a long way to covering the loss of aviation taxes revenue. The EU needs to ensure that these taxes are lifted to boost economic growth, tourism and the creation of new jobs.