Travel tax - We must learn from mistakes

The chiefs executive of Aer Lingus, Ryanair and Cityjet have joined together in calling on the Government to scrap the €10 travel tax announced in last year’s budget.

It is the first time that Ryanair boss Michael O’Leary and any chief executive of Aer Lingus issued a joint statement on anything.

Since the imposition of this tax last March, there has been a 15% fall in monthly traffic at Dublin Airport. Following last year’s budget, Finance Minister Brian Lenihan admitted in March that raising the VAT rate by 0.5% had cost €700m in lost revenue as a result of the number of people who crossed the border to do their shopping.

We must learn from such mistakes.

The Department of Finance contends the travel tax is discouraging Irish people from holidaying abroad, but this is offset by a decline in tourist traffic into this country. Belgium and the Netherlands have already scrapped their passenger taxes, while Spain and Greece have reduced their airport charges.

Hence the Irish tax stands out all the more. It could cost the economy around €450m in lost tourist revenue. Lowering taxes helped to end the last recession and the Government must show imagination in facing our current crisis.