The tax was expected to raise €95 million in 2009 and €150m in a full year. However, figures from Revenue show the Government has collected just €58m from the tax in five months and it has now revised its estimates to €125m.
Airline analyst, Joe Gill, estimates the tax could cost the economy around €450m a year as tourists will stop coming to Ireland.
The travel tax was announced in last year’s Budget and came into effect at the end of March this year, resulting in every person leaving Ireland travelling over a certain distance being forced to pay an extra €10 per flight.
Mr Gill said the tax was “regressive and ignorant of seasonal trends in air travel demand”.
“It hurts lower income earners and ignores the sharp decline in air fares during off-peak winter months. As a result, it hammers demand by price- conscious consumers and those who will travel to Ireland in the off-peak months,” he said.
Aer Lingus chief executive Christoph Mueller, Ryanair’s Michael O’Leary and Geoffrey O’Byrne-White of CityJet issued a joint statement yesterday saying that since the tax was imposed the monthly traffic at Dublin Airport had fallen up to 15%.
The airline chiefs said the Belgian and Dutch governments had scrapped their passenger taxes in order to stimulate tourism while the Greek and Spanish governments had reduced airport charges to stimulate tourism.
The joint statement came about following a meeting of the Dublin Airport Consultative Committee, of which all the airlines are members.
The Government-appointed Tour-ism Renewal Group recently recommended that the tax be scrapped.
Although it is not officially calling for the scrapping of the tax, Aer Arann said yesterday it would “obviously welcome any development that will encourage more people to fly as this will support business, the tourism industry and the economy generally”.
A spokesperson from the Department of Finance said if the tax was discouraging tourists coming to Ireland, then on the reverse side it must be accepted that it was also discouraging Irish people taking holidays abroad, thereby offsetting in part any impact it may have on the tourism industry.