UK to increase APD to offset falling traffic: reports

UK's government has proposed increasing APD to cover an expected tax revenue shortfall caused by fewer travellers passing through UK airports (Mail Online, 28-Aug-2011). The government has predicted a GBP500 million loss within four years as its predictions for passenger numbers decrease. HM Treasury has drafted plans to address the shortfall by increasing APD by 25% for departing passengers. The government has attributed the passenger traffic decline to sluggish economic conditions, but British airlines and airports believe the tax has deterred travellers. British Air Transport Association CEO Simon Buck said the government was taking the wrong action, which could reduce passenger numbers further. He recommended the "tax be phased out to encourage tourism and help kick start the economy."