SCOTLAND’S new air departure tax (ADT) will not be introduced until after April next year, MSPs were told yesterday.
Taxation powers over aviation were devolved to the Scottish Parliament in 2016, with proposals to replace air passenger duty (APD) with ADT, set at half the current rate.
The SNP have a long-standing policy to cut the new tax by 50% before eventually scrapping it. They say this will boost the economy by increasing the number of flights in and out of the country.
The policy has faced legal challenges, however, with EU approval needed under state aid rules to provide an exemption for the Highlands and Islands, without which, it has been argued, could hit tourism in the region.
READ MORE: How Scottish airports lobbied for a £300 million tax cut
In a written answer to the Scottish Parliament, Public Finance Minister Kate Forbes said that, having failed to find a solution with the UK Government, the introduction of ADT would be put back.
She wrote: “The Scottish Government has been clear that it cannot take on ADT until a solution to these issues has been found because to do so would compromise the devolved powers and risk damage to the Highlands and Islands economy. Since then the Scottish Government and UK Government have continued to work together to try to find a solution. The Scottish Government also established a Highlands and Islands Working Group last year to provide independent, expert input into the examination of the issue.
“However, a solution has not yet been found that would be ready for introduction at the beginning of the next financial year. This, taken together with the continued uncertainty around Brexit, means we have to defer the introduction ADT beyond April 2020.
“While we work towards a resolution to the Highlands and Islands exemption, we continue to call on the UK Government to reduce APD rates to support connectivity and economic growth in Scotland and across the UK.”
Tory transport spokesman Jamie Greene criticised the delay, claiming the SNP had “failed miserably to deliver a flagship policy”. Scottish Greens co-convener Patrick Harvie MSP said the SNP should ditch the policy and concentrate on investing in affordable public transport.
A Scottish Government spokeswoman said: “We remain committed to reducing ADT by 50% and abolishing it when resources allow.”
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