Taxation and aviation fuel
Sir, – The decision to increase VAT on the tourism and hospitality sector should turn our attention to the tax status of the aviation sector.
Not only is aviation entirely exempt from VAT, but it also pays zero tax on fuel.
But unlike the lower VAT rate for the tourism and hospitality sector, which exclusively benefited those who holidayed in Ireland, these zero rates for the aviation sector also benefit those who holiday abroad.
Such tax breaks are in effect a generous dig-out to the tourism industry in Spain and elsewhere.
Introducing a per passenger tax, with rates similar to those which currently exist in the UK, would by some estimates raise over €500 million a year – more than the exchequer will gain from the increase in tourism VAT.
This is to say nothing of correctly pricing what is the most carbon-intensive mode of transport. – Yours, etc,