9 December 2010

The Air Travel Tax on passengers leaving Irish airports is to be reduced from £8.50 (€10) to £2.50 (€3) the Minister for Finance unveiled in the Budget 2011.

 Noting there had been calls for the abolition of the tax on the basis it was causing a reduction in visitor numbers, Brian Lenihan said it was decided that a reduced Air Travel Tax would come into effect on 1 March 2011. However, this reduced rate is being applied on a temporary basis until the end of 2011.

 The position on air travel tax will then be reviewed and the rate will be increased unless there is evidence of an appropriate response from the airlines and not an increase in fees or charges.

 Minister for Tourism, Mary Hanafin, said the travel tax had been identified as a key requirement to help boost overseas visitor numbers, adding that she hoped that airline would respond positively to the cut.

 The Air Travel Tax on departures was introduced on 30 March 2009, and is expected to yield  £89 million (€105 million) in 2010, despite the impact of volcanic ash on air travel earlier this year.

 It recently emerged the tax infringes rules of the European Commission (EC), which has taken infringement proceedings against Ireland.

 Officials are also demanding that the same rate of tax should apply to all journeys within the EU. Currently a £8 (€10) tax applies to journeys from Ireland, apart from flights to destinations less than 300km from Dublin. A lower £1.60 (€2) rate applies to such destinations within Ireland and in parts of Britain.