Air passenger duty replacement tax could be delayed
The Scottish Government aims to abolish the levy completely at a later date.
The Scottish Government's plans to replace air passenger duty may have to be delayed, the finance secretary has announced.
The devolved administration wants to replace the duty with an air departure tax (ADT) to cut the levy by 50% by 2021, with an overall aim to abolish it at a later date.
Derek Mackay told MSPs that ADT's introduction could be delayed because proposals to continue with an exemption for passengers who fly from Highlands and Islands airports require EU approval under state aid rules.
The minister told MSPs the matter has been discussed with UK Government ministers but he felt their response was "disappointing".
Opposition parties, both those for and against the policy, reacted angrilly to the announcement at Holyrood on Thursday.
The Tories, who back the aviation tax cuts, said ministers were "trying to weasel out" of their commitment.
The Greens said the finance secretary had come up with a "technical pretext to save his blushes".
The airline industry also expressed its frustration with the potential delay.
Edinburgh Airport chief executive Gordon Dewar said the subject had been the discussion of a now lengthy debate with no "meaningful outcome".
Mackay told MSPs his counterparts in the UK Treasury had "serious concerns" about approaching the EU about the changes as it may mean Scottish ministers have to"accept full liability" for all risks, including the historic operation of the tax, if the EU does not approve the exemption.
"The conditions the UK Government have sought to impose are clearly not acceptable," Mr Mackay explained.
"This government therefore finds ourselves placed in a deeply unsatisfactory position.
"We could choose not to introduce the exemption for Highlands and Islands flights. This would ensure ADT remains within EU state-aid rules and avoid the need for notification but would bring an unacceptable cost to the fragile economies of the Highlands and Islands."
UK ministers have suggested the implementation of the tax could be deferred for "an unspecified time period", he said.
The minister said the Scottish Government has proposed an amendment to its block grant from the Treasury to fund the exemption, which would allow the tax to be implemented on time.