The Chartered Institute of Taxation (CIOT) has commented on the Scottish Government's announcement not to proceed with plans to reduce Air Departure Tax (ADT).
Ministers today announced that they would not proceed with plans for a reduction in the tax that had been expected by the end of the current term of the Scottish Parliament in 20211.
The CIOT has previously warned that a lack of detail around how the tax would operate made it difficult to determine how ADT could support the Scottish Government’s original policy objectives of improving connectivity and supporting economic growth2.
The Institute used today’s announcement to call for greater clarity over how the tax will operate in practice once issues involving EU state aid rules have been resolved.
John Cullinane, CIOT Tax Policy Director, said:
“Now that Ministers have used today’s statement to refocus their policy priorities, the next objective must be to find a solution to the state aid issues preventing the tax from being implemented and on agreeing the detailed rules under which ADT will operate.
“The Scottish Government’s plans for ADT – regardless of the rates ultimately proposed – have been hampered by a lack of detail over how the tax will operate. Basic questions – such as who will pay what, when they will pay it and who is exempt from the tax –all require answering before the tax is in a position to take off.
“With this information lacking, it has been difficult to say with any certainty what impact the tax would have on the government’s objectives of improving connectivity, promoting economic growth and now, meeting its climate change targets. This hampers the ability of MSPs to properly scrutinise the detail behind the legislation".
Notes for editors
- Page 9 of the SNP manifesto for the Scottish Parliament elections of 2016 stated: “We will invest in our transport infrastructure and reduce Air Passenger Duty by 50 per cent during the course of the next Parliament”
- See Tax professionals respond to Air Departure Tax Bill vote (CIOT, 20 June 2017)