Tax rises on flights in PBR

Tax rises on flights in PBR

Chancellor set to pilot scheme which will raise air passenger duty, but will not use tax to make flights prohibitively expensive

Gordon
Brown
will raise air passenger duty but aim to avoid penalising airline
passengers with stiffer taxes in his imminent Pre-Budget Report, despite the
Government’s proposed offensive on climate change by targeting the aviation
industry.

The Chancellor has previously backed the idea that ticket prices should be a
reflection of the airlines’ impact on the environment through CO2 emissions, but
baulked at the option of using taxes to price passengers off planes.

Ryanair
CEO Michael O’Leary panned the idea of raising taxes to combat climate change
when the airline industry reacted to the possible clampdown.

Treasury
sources stated that the PBR will outline measures designed to reduce carbon
emissions, including raising air passenger duty from its present level, which
range from £5 for ‘no-frills’ flights to European countries to £40 for long-haul
trips, The Guardian reported.

Carbon trading has been floated as another method of tackling C02 production;
the practice allows the Government to regulate the amount of CO2 emissions
produced in aggregate by setting an overall cap, but gives companies the
flexibility to buy or sell an extra allowance from other market
participants depending whether their CO2 are higher or lower than their agreed
level.

Related Links:

Tories put carbon tax plans on the table 

KPMG: Brown’s pre-Budget to focus on stability and
flexibility
 

Green tax furore snowballs after leaked letter

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