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​​The aviation industry supports trade, employment and economic growth. In 2016, airlines and their customers are forecast to generate $118 billion in tax revenues. That’s the equivalent of 45% of the industry’s GVA (Gross Value Added, which is the firm-level equivalent to GDP), paid to governments. Unwarranted or excessive taxation on international air transport has a negative impact on economic and social development. 

Our role

IATA, in conjunction with its industry partners, is committed to ensuring that airlines are subject to fair and efficient taxation measures with respect to their operations, regardless of location. ​

IATA works with the airline industry to ensure that government authorities worldwide honor and adhere to the International Civil Aviation Organization (ICAO), the Organization for Economic Cooperation and Development (OECD), and the United Nations taxation principles. In this regard, IATA is actively involved in a range of activities including:

  • Ensuring that new and existing taxation measures (be they direct or indirect) are fairly applied and adequately consider the economic and social ramifications;

  • Lobbying against measures that result in double taxation; and

  • Advocating against taxation measures that unjustly target the industry, where the resulting tax revenues are not reinvested in air transport related services and infrastructure. 

At the recently concluded 39th ICAO Assembly we presented a  working paper on taxation 



IATA on taxation

Various forms of taxation impact the success and growth of the aviation industry. The demand for air travel is highly sensitive to changes in prices. Inefficient and burdensome tax measures that increase the cost of air travel will have a negative effect on demand. This, in turn, will hamper economic growth.

Learn more about IATA’s positions on various forms of taxation impacting the industry: 

And more generally: Aviation taxes and charges (pdf)

Recent developments in taxation

Increase in the passenger movement charge in Australia

The Australian Government recently announce a proposal to increase the Passenger Movement Charge (PMC) from AUD 55 to AUD 60 per departing international passenger. This proposal not only contradicts ICAO and international standards on taxation, but more broadly, will have a negative impact on Australian economy.  IATA submitted a letter that opposes the increase and has called for a full review of the rationale of the PMC with a view to its abolition.
Download impact assesment of the removal of the passenger movement charge.

Air Transportation Tax, Norway

  • The Norwegian Government recently announced that it was planning on introducing an air transportation tax equivalent to NOK 80 on departing passengers on both domestic and international flights effective 1 April 2016.  Further, we understand that this tax is to be subject to Norwegian VAT at a rate of 10% for domestic flights. 
    This tax directly contradicts ICAO taxation policies and will have a detrimental impact on the Norwegian economy if implemented. 

In December 2015, IATA submitted a letter to the Norwegian Minister of Finance (pdf) challenging the imposition of the air transportation tax and calling for its repeal.

Further to our submission in December 2015, IATA submitted the attached letter (pdf) and comments (pdf) in relation to the Norwegian Government’s Consultation Paper on the Air Passenger Tax in February 2016. 

IATA continues to strongly oppose and challenge this tax on economic and tax policy grounds and requests that the tax be withdrawn.

In a recent development IATA and other European Aviation associations have sent the attached letter (pdf) to the Norwegian government expressing their continued strong opposition to the proposed passenger tax.

VAT, The Bahamas

  • Levying VAT at 7.5% on passenger charges and fees related to international transport. 
    This treatment directly contradicts ICAO taxation policies on international air transport and the standard VAT treatment of exports.

In June 2015, IATA submitted a letter to the Bahamian Ministry of Finance challenging the imposition of VAT (pdf) on the various charges and fees. 

We are working closely with other industry associations (e.g. ALTA, National Airlines Council of Canada) to attempt to remove the VAT on the passenger charges and fees. 

VAT, Bangladesh

  • The Civil Aviation Authority Bangladesh and the National Board of Revenue is contemplating the levying of VAT on various aeronautical and non-aeronautical charges with retroactive effect dating back to FY2009-10.  This treatment directly contradicts ICAO taxation policies on international air transport.

We have been liaising directly with the Bangladesh Government and local industry associations (e.g. BAR-Bangladesh) to remove the imposition of VAT  (pdf) on these charges. 

Ticket Tax, New Zealand

  • As part of the recently passed Border Clearance Levy Bill, New Zealand will introduce an arrival and departure fee for international travel beginning 1 January 2016. Such a fee contradicts Policies on Charges for Airports and Air Navigation Services contained in ICAO Document 9082, the Chicago Convention and ICAO taxation policies on international air transport.

IATA has been actively involved in the consultation process initiated by the New Zealand Ministry of Primary Industries and the New Zealand Customs Service in relation to the Border Clearance Levy.

In June 2015, we submitted a letter as part of the consultation process challenging the Border Clearance Levy (pdf) on both international regulatory and economic grounds.  

Ticket Tax / Special Interest Tax, Kingdom of Tonga

  • The Kingdom of Tonga is levying a departure tax of TOP 100 (approx. USD 50) on international travel from Tonga in order to fund services related to the 2019 Pacific Games.  Such a tax directly contradicts the Chicago Convention and ICAO taxation policies on international air transport.  The resultant average fare increase of 13.4% for a one-way ticket out of Tonga could negatively impact the Tongan tourism industry.

IATA has been liaising directly with the Tongan Ministry of Finance and National Planning with respect to the removal of the departure tax. 

IATA submitted several formal communications to the Tongan Government in June 2015 outlining the departure tax’s violation (pdf) of standard international principles of airline taxation and the negative economic consequences of the tax. 

Read more about our taxation policies in our archive of reports.

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