Scottish government faces questions over planned APD cut

Scottish government faces questions over planned APD cut

The Scottish finance secretary has been told to show MSPs there is independent economic evidence to back a proposed cut to aviation taxes.

The government in Scotland takes control of Air Passenger Duty from 2018, with plans to to cut it by half and eventually abolish the tax.

The government wants to pass laws enabling changes before setting out the detail of proposed rates and bands.

But convener Bruce Crawford told finance secretary Derek Mackay that the finance committee’s report would call for more evidence.

He said there was a “growing consensus” about this, amid “wide-ranging criticism” of the lack of evidence available on the environmental and economic impact of cutting the tax.

The Air Departures Tax (Scotland) Bill under consideration is “enabling legislation” to set up the devolved tax, a replacement for APD, but does not go into detail about rates.

When the bill was introduced, the government said it would allow it to “progress plans for a 50% reduction in air tax by the end of the current parliament, with the levy to be abolished “when finances allow”.

Opposition parties and tax experts have raised concerns about this, with the Chartered Institute of Taxation saying it was important for the government to publish “as much detail and possible” to allow “robust and effective scrutiny and greater clarity around what these reforms can deliver”.

During a finance committee meeting examining the legislation, SNP MSP Crawford told Mackay that the group’s report would recommend an independent economic assessment, he BBC reported.

He urged the finance secretary not to wait for the report, but to “assume that’s going to be in it so we can begin to answer some of these questions”.

Scottish Green co-convener Patrick Harvie questioned Mackay about what evidence the government currently had about the economic and environmental impact of cutting the tax.

Conservative MSP Murdo Fraser described the current evidence available as “poor”, while Labour’s James Kelly said it was important the government brought forward “robust research”.

Mackay said there was still work to be done around “the specifics of the policy”.

Addressing environmental arguments, he said: “This stage is the enabling legislation to allow us to collect the tax.

“More detail comes from the tax rates and bands, and from that, more information around what the impact of that would be would require a strategic and environmental assessment.

“Looking at the government’s ambitious environmental policies, it’s recognised that we will have to work harder in other areas, to recognise that such a policy could lead to an increase in emissions.”

Focusing on economic criticisms, Mackay said: “Our officials have certainly looked at all the reports and considered them.

“We haven’t commissioned to the best of my knowledge any independent research of our own. If committee wishes me to look at that, I will certainly consider that absolutely.”

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