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Cutting tax on flights 'could reduce public service funding'

Figures indicate Air Passenger Duty is expected to raise around £1.6b by 2023/24.

Flights: Government aimed to replace Air Passenger Duty.
Flights: Government aimed to replace Air Passenger Duty.

Reducing the tax paid by passengers on flights from Scotland's airports could reduce cash to public services by £780m, it has been claimed.

The Scottish Government had aimed to replace Air Passenger Duty (APD) with an Air Departure Tax (ADT), set at half the current rate.

However, it said plans to continue exempting journeys from airports in the Highlands and Islands required EU approval under state aid rules.

Control over aviation tax was handed to the Scottish Parliament as part of the latest phase of devolution.

Figures provided by the Scottish Parliament Information Centre (SPICe) indicate APD is expected to raise around £1.6b by 2023/24.

However, projections suggested cutting the tax by at least 50% in the 2019/20 Scottish Government budget and retaining that level for the following five years until 2023/24 would lead to forecast revenues being reduced to £780m.

Finance Secretary Derek Mackay has already said implementing the new tax at the start of the next fiscal year in April 2019 "is not possible".

Despite that he said: "The Scottish Government has a longstanding commitment to reduce ADT by 50%."

Scottish Labour said a reduction in the rate would deliver a tax cut for first class passengers and a lower investment in public services.

James Kelly MSP, the party's finance spokesman, said: "These figures reveal just how much the SNP and Tory coalition to cut APD would harm Scotland's public services.

"Rather than delivering a boon for first class passengers in cahoots with the Tories, the SNP should focus on using the powers of the Scottish Parliament to invest in Scotland's lifeline services.

"Ahead of the budget, it is now the right time for SNP Finance Secretary Derek Mackay to announce he is dropping the unworkable and economically damaging plan to cut APD."

A Scottish Government spokesman said: "It is simply wrong to say only first class passengers would benefit from any tax cut.

"Our plan to cut Air Departure Tax for passengers will improve Scotland's international connectivity, provide a boost to our economy, and a financial benefit to all types of households. This being especially important given the economic threat posed by Brexit.

"UK Air Passenger Duty is the most expensive tax of its kind in Europe and one of the highest in the world and continues to act as a barrier to Scotland's ability to secure new direct international services and maintain existing ones.

"While it continues to operate in Scotland, we call on the UK Government to act now and reduce APD rates to support connectivity and economic growth across the UK."

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