Industry calls on UK government to reverse decision to end airport tax free sales

(Photo: Gatwick Airport)

Airports and the duty-free retail industry write to the UK chancellor of the exchequer

The Airports Council International (ACI) World has joined with the Duty Free World Council and the Tax Free World Association to urge the government to reverse its decision to end airport tax-free sales to international passengers for all goods other than alcohol and tobacco.

The COVID-19 pandemic has impacted the aviation industry hard, as ACI recently revealed that global passenger numbers are set to decrease by 5.6 billion. Airports employ 60% of those working in the aviation industry, including the duty-free staff.

The group say that tax-free sales will be imperative towards the long-term recovery of airports, contributing to the vitality of the airport industry and the development of infrastructure.

There is now a cause for concern as the government announced earlier this month that tax free sales on airside products, excluding alcohol and tobacco, will end on January 1, 2021.

Global representative organisations for airports and duty- and tax-free retail industry have joined forces by writing a letter to Rishi Sunak, urging him to re-evaluate the proposed plan.

“The aviation industry will be a key driver of the UK’s economic recovery from the COVID-19 pandemic but this decision by the Government puts this recovery at risk,” said Luis Felipe de Oliveira, ACI World director-general. “We urge the UK Government to reverse this ill-advised decision as it threatens the already perilous financial state of the airport industry with UK airports standing to lose hundreds of millions of sales, placing thousands of jobs at risk.”

If the new policy is put in place, airports in the UK will be put at a disadvantage compared with other European and international facilities where sales will continue.

Tax-free products account for three-quarters of retail concession revenues at airports. This policy will therefore be damaging for the airport industry and could jeopardise the sectors economic recovery.

Sarah Branquinho, the Duty Free World Council president believes that the aviation industry provides an essential link to the global economy.

“Unilateral decisions by individual governments on air transport-related matters – including duty-free regulations – cannot be taken without considering the global industry as a whole,” Branquinho said. “The UK Government’s decision to end tax-free sales is an unnecessary blow as airport retailers face the worst crisis ever to impact the aviation industry.”

The UK aviation sector contributes £95bn to gross domestic product and 1.6 million jobs