UK Not Swayed on Departure Tax

June 8, 2012 International TaxationNew Zealand Taxation

Lufthansa A340-300The UK is unlikely to reduce its departure tax for long haul flights, despite an appeal from the Prime Minister of New Zealand.

Earlier this week the Prime Minister John Key said that there is little chance that the UK would back down over its recent hikes to departure taxes, which are expected to have a strong negative effect on the number of UK tourists coming to New Zealand.

John Key was scheduled to meet with the Prime Minister of the UK David Cameron on June 5th, and was expected to raise the issue of the UK’s departure tax and the adverse affect that the charge will have on the number of tourist who will see New Zealand as a viable tourist destination.

Following the meeting the New Zealand Prime Minister indicated that it is unlikely that the tax would be removed, saying “…I think in the short term we are fighting a losing battle.” He explained that the UK is currently facing a significant budget deficit and the departure taxes are an “essential revenue-collecting exercise”.

The hike to the departure taxes was first announced in December 2011, and forecasts created at the time indicated that, under the new rate, a family of four flying to New Zealand could face departure taxes of almost NZD 800 to leave the UK.

Explaining the significance of the raised departure tax rate, the Prime Minister said that it is already evident that less UK tourists are coming to New Zealand throughout 2012.

Photo by caribb