THE €10 air travel tax may be lowered or even scrapped in next week’s budget after it emerged that it infringes European Commission rules.
The commission has taken infringement proceedings against Ireland over the much-criticised tax, which was introduced last year.
Officials are demanding that the same rate of tax should apply to all journeys within the EU.
Currently a €10 tax applies to journeys from Ireland, apart from flights to destinations less than 300km from Dublin.
A lower €2 rate applies to such destinations within Ireland and in parts of Britain.
The proceedings were taken last March, but only came to light yesterday after documents were released to Ryanair under Freedom of Information legislation.
Ryanair, which has campaigned against the tax since it was introduced, said the proceedings showed that the Government would have to scrap it or impose a uniform €2 rate on all flights from Ireland within the EU.
“These records clearly show that the commission agrees with Ryanair’s complaint that this €10 tax has been illegally applied here in Ireland,” said the airline’s spokesman Stephen McNamara.
However, a Department of Finance official, in a memo released under the Freedom of Information Act, says introducing a single tax would require a rate of about €9. “But €10 has a nice ring to it,” the official adds.
A department spokeswoman said yesterday the commission’s move was only the first stage of an infringement process.
“As is the practice, the commission’s letter was examined by the Irish authorities, the relevant Departments of Transport and Tourism are aware of the issue and the Department of Finance has responded.”
She refused to release the department’s response, saying it was part of an ongoing EU investigation.
The tax was originally expected to yield €125 million a year but the spokeswoman said the forecast for this year was €105-110 million.
However, Minister for Tourism Mary Hanafin admitted this week that the actual yield this year would be some €80 million because of a drop in visitor numbers.
She said removing the tax was under consideration by the Government because of its failure to generate the expected income.
Visitor numbers to Ireland are down almost 12 per cent on last year, a trend Ryanair has blamed on the tax.
