Key: Lowering of UK departure tax unlikely
Wed, 06 Jun 2012 8:25a.m.
New Zealand is fighting a losing battle in its bid for Britain to curb its recently-raised departure tax, says Prime Minister John Key.
In April the UK government boosted its departure levy by eight percent in a move New Zealand tourism operators said would reduce the number of inbound Brits.
Mr Key planned to raise the issue during a meeting with his British counterpart on Tuesday night, but was not confident of a positive resolution for New Zealand.
"I think in the short term we are fighting a losing battle," Mr Key told reporters in London.
"The simple facts of life are the UK has a big budget deficit, they need to fill that gap, and this is (an) essential revenue-collecting exercise.
"Our big concerns are of course that it is deterring people from coming to New Zealand, we can see that through our visitor numbers.
"I don't think it's good actually for the UK either because it makes it an expensive destination for them to transit through to Europe.
"We obviously also worry about the contagion effect - other countries putting these sort of taxes on. So I'll certainly raise it, but I think in the very short term you're not going to get a reversal of that."
The hike in departure tax was announced in December, when forecasters estimated it would mean a family of four would pay just under NZ$800 in levies to leave the UK bound for New Zealand.
Tuesday night's dinner at Downing Street will also be attended by Canadian Prime Minister Stephen Harper.
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