Aviation should pay "fair share" in taxes
British MPs have backed the controversial aviation tax, Airport Passenger Duty (APD).
They said: "It is right that the aviation sector should be contributing its fair share to Government revenues."
In its report on The Future of Aviation by the House of Commons select committee on transport, the MPs said: "The level of Air Passenger Duty should therefore be set according to the Government's revenue needs, taking careful account of the economic importance of the aviation industry.
"It also needs to be mindful of the state of the aviation industry in the current economic recession and to take account of competition from other European airports.
But the MPs criticised the UK government for not providing a "factual account" of how much the industry did pay in tax.
The latest figures were for 2004 when the Oxford Economic Forecasting said it had contributed £3.6bn though APD, income tax, corporation tax and national insurance.
The MPs were told by some of its witnesses that aviation was less heavily taxed than motorists.
But others claimed that the industry did not receive benefits in infrastructure that motorist and rail users received.
The MPs concluded: "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."
The report was criticised by Andy Harrison, easyJet's ceo and one of the committee's witnesses.
He said: "The key to sustainable aviation is technology not taxation!
"This means setting minimum standards for aircraft emissions to force airlines to use the most modern aircraft and to force aircraft manufacturers to bring forward the next generation of aircraft much sooner.
"We already have minimum standards for aircraft noise, car emissions, diesel engines and many other products - aircraft CO2 emissions are the logical next step.
"We must also reform perverse taxes like APD, which taxes full aircraft more than empty aircraft. How daft is that?"
www.publications.parliament.uk/pa/cm/cmtran.htm www.easyjet.com