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Air Passenger Tax increases

Latest update 6 December 2019

OVERVIEW

Please see the download section on the top right hand corner of this page to read the overview of this section and scroll down the page to read the latest updates on ERA's activities and position.

ERA’S CURRENT POSITION

ERA is extremely concerned and is following the issue very closely, lobbying against proposals for increased aviation taxation.

As stated in its position on the European Commission’s Communication on 'An Aviation Strategy for Europe', ERA welcomes the Strategy’s recognition of the economic burden of aviation-specific taxes, levies and disproportionate regulation. More efficient, market-based mechanisms, are a more cost effective and environmentally sound solution to tackle emissions from aviation, therefore ERA recommends that the EU’s legislators propose a set of concrete measures to member states to remove aviation-specific taxes. ERA also recommends a full review of existing regulation to reduce the regulatory burden placed on the industry.

UPDATE

Latest update 06/12/2019: ERA presented an overview of national "green" taxes and madates at the latest ERAIndustry Affairs Group meeting in November. The presentation is available to download from the top of this page.

13/11/2019: Nine EU finance ministers (from Belgium, Bulgaria, Denmark, France, Germany, Italy, Luxembourg, the Netherlands and Sweden) have called on the next European Commission to propose new measures on aviation pricing. The Dutch-led initiative claims that “aviation is not sufficiently priced” compared to other transport modes.

The nine countries in question are responsible for more than half of the EU’s aviation emissions. Spain and the UK are notable absences from the letter, although both will hold elections over the next month.

In May, the Dutch government announced that in lieu of an EU-wide strategy it would start taxing tickets in 2021. Germany and France have also proposed increased levies on passengers. is moving towards increasing existing levies on passengers.

Reacting to the proposed French tax, ERA Director General Montserrat Barriga has commented: “while curbing demand by taxing aviation may look like a promising avenue to some, it raises important questions and requires a thorough and concerted impact analysis. One aspect to be emphasised is the impact of aviation tax on European regions. There is little doubt that regional communities across Europe have come to depend on air connectivity for their development. Taxing aviation involves risks as the economics of regional air connectivity are fragile and subject to volatile/changing market dynamics. ERA is understandably concerned that taxing aviation would hurt regional air connectivity in a disproportionate way. This means that taxing aviation raises serious issues of social and territorial inequality – the very themes that are driving public debates and politics across the EU right now.”

07/12/2017: In a joint letter to the Dutch Minister of Finance (see attached document in the downloads section on this page), ERA and other leading industry associations urge the Dutch Government not to proceed with its planned taxation policy, highlighting several important issues in relation to this proposed taxation policy, including the negative impact on the Dutch economy, the inefficiency of such forms of taxation and contradictions with accepted international law, standards and principles.

In addition to the contradiction with international law and principles, the letter highlights the negative impact of the previous air passenger tax in the Netherlands and other European countries. The proposed taxation policy is also at odds with the principles that underlie all of ICAO’s requirements regarding environmental levies. ICAO adopted a Global Market-Based Measure in October 2016 to address emissions from international aviation, with overwhelming support from ICAO’s member states. The ICAO Assembly Resolution stipulates that CORSIA is to be the sole market-based measure applying to CO2emissions from international aviation. The Preamble of ICAO Resolution A39-3 reiterates that market-based measures should not be duplicative and international aviation CO2 emissions should be accounted for only once. Moreover, intra-EU flights are subject to the EU Emissions Trading Scheme, in which airlines already pay their contribution towards reducing the environmental impact. 

As absolute minimum, ERA, together with the other aviation associations, request that the Dutch Government undertakes an independent evaluation of the economic and environmental impact of the policy and holds an open and constructive public consultation process before making any final decisions. The aviation, travel and tourism sector plays a critical role in, and contributes significantly to, the Dutch economy and this should be supported and nurtured, not hindered by ineffective government taxation.

14/12/2016: The Norwegian Government, in its budget proposal for 2017, recommended an increase to the Air Passenger Tax from NOK 80 to NOK 82 per departing domestic and international passenger, where domestic departures would continue to be subject to VAT at 10 per cent. The increase, if approved, would be applied on a flown passenger basis as opposed to a sales/ticket basis and would be effective as of January 2017. IATA has submitted letters to the Norwegian authorities requesting that the proposed increase be removed and at a very minimum, that the increase be applied on a sales/ticket basis.

CONTACT

For further information please contact policy.technical@eraa.org