Trade pressure leads to air tax scrutiny

The government has promised to review a taxation system which could severely impede importers of fresh produce after pressure from the industry.

The Fresh Produce Consortium (FPC) raised concerns with both the Treasury and the department of transport about the impact on airfreighted fresh produce when the Chancellor of the Exchequer announced in the budget that the government would consider a ‘per plane’ duty tax.

In the budget the Chancellor stated: “The government will explore changes to the aviation tax system, including switching from a per-passenger to a per-plane duty, which could encourage fuller planes. Major changes will be subject to public consultation.”

The FPC lobbied the Treasury regarding the potential impact on imported fresh produce, the vast majority of which is transported in the hold of passenger aeroplanes.

The department of transport and the Treasury confirmed to the FPC that it is ‘to explore changes to the aviation tax system and that major changes will be subject to public consultation. This will ensure that all views are heard, and I hope you will contribute to a future consultation’.

The FPC said: “We believe that by allowing airlines to decide who pays for this tax, the airfreight of fresh produce from developing countries could be unfairly and disproportionately penalised in order to subsidise low cost flights for passengers.”