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Ryanair Calls For Ireland To Follow Belgium's Lead And Scrap Travel Tax

by Jason Gorringe, Tax-News.com, London

11 November 2008


Ryanair, Ireland’s largest low fares airline, made a plea late last week for the Irish Government to abandon its plans to introduce a EUR10 travel tax, which it claims will severely impact Irish tourism.

The call was made in light of the news that the Belgian government had abandoned its plans for a similar tax amid fears of the impact in Belgium.

Ryanair said the very least the Irish government should do is review its proposed travel tax and alter the basis of the tax so that it is a percentage of the fare rather than a flat rate of tax. Ryanair once again underlined the importance of any proposed tax burden falling on those who can afford to pay it most.

Ryanair’s Stephen McNamara commented last Friday:

“It is obvious that the Belgian government listened to the concerns of the tourism and aviation industries on the impact this tax would have on tourism. Since the Irish government announced its EUR10 travel tax we have expressed our concerns on the impact it would have on Irish tourism especially on the tourism industries in the West. We are now asking the Irish government to follow the lead of their Belgian colleagues in abandoning this unfair travel tax. At a very minimum the government must consider how this tax can be more equitable and minimise the impact it will have on tourism in Ireland," he explained, going on to add:

"Today, we once again ask that any passenger tax should be on a percentage basis so that those who can afford to pay higher fares, pay a slightly higher rate of tax, but those paying the lowest fares, pay a more equitable rate of tax and not a EUR10 tax which in a place like Shannon will equate to over a 100% rate of tax for large parts of the year."

Ireland's Finance Minister, Brian Lenihan, announced in October that the new tax would be imposed at a flat charge of EUR10 per passenger, with shorter journeys attracting a EUR2 charge. The levy is due to be introduced in March 2009 and is expected to raise EUR150mn in revenues annually.

Ryanair fears that its services will now become uncompetitive when compared to competition from the sea travel industry and other airlines, adding strain to a business in an already vulnerable industry.


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