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Air Passenger Duty is currently set by the Westminster Government. With independence, the Scottish Parliament will be able to set Air Passenger Duty at a level that suits Scotland – or abolish it entirely.

It is estimated that Air Passenger Duty will cost Scotland more than £200 million a year in lost tourism spend alone by 2016. In addition to the direct losses to the Scottish economy, another report earlier this year found that reducing Air Passenger Duty would increase receipts from other taxes, such as VAT.

As an early priority for action following independence the current Scottish Government proposes a 50 per cent reduction in APD, with a view to eventual abolition of the tax when public finances allow.

Source: Scotland's Future, Scottish Government, November 2013.