WE NEED ANALYSIS OF EFFECT OF ADT BEFORE IT DAMAGES GROWTH
Reform Scotland, the independent think tank, has called for the Scottish Government to carry out its own economic modelling of its new Air Departure Tax (ADT) before it is implemented in April 2018. ADT is the replacement for Air Passenger Duty (APD), which the Scottish Government will disapply to Scottish Airports at that time. The Government’s stated ambition is to scrap air tax altogether – an ambition shared with Reform Scotland.
However, in its written evidence to the Finance and Constitution Committee, Reform Scotland has expressed concern that the legislation before the Scottish Parliament does not set out who the tax will apply to and what the rate will be. As a result, because the exemptions to the tax are not set out in this legislation, the new tax, as currently drafted, would apply to children (whereas the current APD does not). Exemptions have been set out in previous primary legislation (see notes to editors).
Commenting, Reform Scotland’s Research Director Alison Payne said:
“Although Reform Scotland has backed the Scottish Government’s aim of cutting then scrapping APD, we cannot support this Bill. The Scottish Government gave a commitment to cutting the level of APD by 50%. This was a manifesto commitment from the SNP, yet that commitment is not reflected in the legislation as drafted.
“Reform Scotland does not believe that legislation dealing with the creation of a new tax, or any tax, can simply ignore the issue of who will pay and what they will pay, as this legislation does. It is not transparent, nor is it accountable to simply state that they “will be delivered at a later date”.”
Commenting on the need for the Scottish Government to carry out its own economic modelling, Alison Payne added:
“Reform Scotland is calling on the Scottish Government to use the 14 months prior to APD being disapplied in Scotland to perform a full cost-benefit analysis to ascertain the effect on the overall tax take of the new ADT.
“If that modelling shows a projected increase in the tax take, then it can be implemented as planned. However if, as we expect, the modelling shows that it would be more economically beneficial to scrap the tax entirely, then the only responsible decision for the government to make would be to not implement the new tax.”