IATA CEO Tony Tyler (pictured) has hit out at the government’s recent “tinkering” of APD calling the efforts at reform “half-hearted at best”.
Tyler said APD continues to be a “drag” on the economy and the changes are no more than “lip service to this fact”.
Last month chancellor George Osborne announced in his Budget speech the reduction of APD to some long haul destinations from April 2015. He confirmed the two highest of the four APD tax bands are to be scrapped.
The reforms mean passengers on long-haul flights to destinations such as India and the Caribbean islands will pay a lower tax rate from 2015.
A business class Band D flight (includes Australasia, Malaysia and Indonesia) attracts an APD levy of £194 from April 1 this year. This will drop to the Band B rate of £138 (plus any RPI-based rise) in April 2015.
Tyler, who was speaking earlier this week after the release of IATA’s monthly air traffic results, said these adjustments will to nothing for the economy and travellers.
“This latest effort is half-hearted at best,” said Tyler. “Instead of immediately addressing the economic damage of this misguided tax, the government will eliminate the highest bands from next year.
“The APD is a drag on the UK economy that far outweighs even the billions of pounds that it siphons from the pockets of travellers. The government’s tinkering pays little more than lip service to this fact. “
He added it was time properly deal with the issue and called for “decisive action”.
“Taxing a necessity like connectivity as if it were a social indulgence hurts the economy. A comprehensive review is needed,” said Tyler.
All APD changes will come into force in April 2015.