OECD urges governments to ‘monitor impact’ of air travel tax

OECD urges governments to 'monitor impact' of air travel taxBy Ian Taylor

Governments need to recognise tourism as a driver of jobs and growth and “better monitor the impacts of taxation”, says the Organisation for Economic Cooperation and Development (OECD)The OECD launched a Tourism and Trends Policies report at German trade show ITB with a veiled reference to Air Passenger Duty (APD), saying: “There has been an increase in the number and scope of taxes, especially on air travel … [and] governments need to monitor the impacts of taxation on competitiveness.”

The UK industry coalition A Fair Tax on Flying campaign has demanded a review of APD’s impact on the UK economy and its competitiveness, so far without success.

However, the OECD declined to comment specifically on APD or UK tax policy.

Alain Dupeyras, head of the tourism unit at the OECD centre for entrepreneurship, said: “We are able to show some taxes support tourism. But we are not ready to discuss taxation and competitiveness. The evidence is mixed.”

He added: “We won’t enter a discussion of specific taxes.”

Dupeyras said: “Everybody recognises the benefits tourism brings to the economy. Tourism has gained a little in importance because of the [financial] crisis.”

The OECD report covers the period 2008-12 and Dupayras said: “Tourism showed remarkable resilience during the crisis.” But he added: “Active tourism policies are essential.”

The OECD includes most of the world’s developed economies – the European Union and much of the rest of Europe, Turkey, the US, Canada, Australia, Japan, Korea and Mexico.

Its report notes the industry accounts for 4.7% of GDP and 6% of employment in OECD member countries, which together account for almost 60% of global tourism.

OECD members saw average growth in arrivals of 1.9% between 2008 and 2012. However, tourism receipts across OECD members rose just 0.7%.

The OECD report notes: “Long-haul flights from Europe have fallen … as more people take shorter trips” and “travellers are getting older, with around one in four aged over 55”.

As a consequence: “Attracting more tourists from emerging economies will be key.”

But the OECD warns: “Travellers from these countries are likely to encounter more demanding visa and entry formalities when visiting OECD countries.”

It urges: “Governments should put in place measures that identify and facilitate high volume, low risk, legitimate travellers so they can travel more freely.

Sourced from Travel Weekly

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