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Taxation

Impact assessments of proposed or implemented changes in taxation policy affecting the airline industry and its users.

Reports

APD reduction - step in the right direction
Reducing APD burden is a step in the right direction but abolition is required to realize full potential of trade and investment benefits. Abolishing the tax could increase the size of the UK economy by £16 billion over the first three years following abolition, and support a potential extra 60,000 jobs by 2020.
Full report (pdf)

Air Travel Tax harms German economy
Air Travel Tax has adverse impacts in day-to-day functioning of the economy and will likely limit future business opportunities with emerging markets.
Full report (pdf)

Excise and value added taxes on fuel threaten Philippine economy
Jet fuel taxes stand to bring about erosion of trade competitiveness, increase travel costs and weaker Philippine economy.
Full report (pdf)

The impact of abolishing the stabilization fund levy and excise tax on jet fuel in Ethiopia
Significant benefits would be generated to the Ethiopian economy and for air travelers from abolishing the stabilization fund levy and excise tax on jet fuel.
Full report (pdf)

Economic benefits of moderating jet fuel prices and moving to market based pricing of jet fuel for Sri Lanka
An assessment of options and benefits of moderating jet fuel prices and moving closer to market based pricing of jet fuel in Sri Lanka.
Full report (pdf)

The economic benefits of reducing fuel taxes in Ecuador
Abolition of the GDAC tax will reduce international passenger and air freight operating costs, improving the competitiveness of Ecuadorian exports and incentivizing increased air travel.  As a result, the industry’s overall contribution to GDP would rise USD 10.6 million and an additional 800 jobs will be supported.
Full report (pdf)

The economic benefits of abolishing the Air Travel Tax in Ireland
The abolition of the EUR 3 Air Travel Tax levied on departures would decrease the cost of air travel leading to increase in passenger traffic.  The industry’s overall contribution to GDP would rise by EUR 94 million and an additional 1,100 jobs would be supported.
Full report (pdf)

The impact of security, AIDS, solidarity and environment taxes on Chad
The rise in travel costs would limit connectivity and opportunities created from traveling and reduce consumer benefits.  The reduction in travel would negatively impact GDP and employment in Chad.
Full report (pdf)

Economic benefits of abolishing the Passenger Movement Charge in Australia
Abolition of the PMC would benefit the Australian economy, the industry’s overall contribution to GDP would rise by AUD 1.7 billion and an additional 17,000 jobs would be supported.
Full report (pdf)

Impact of international transfer passenger charge in Peru
Imposing a charge of 31 USD per international transfer passenger in Lima will increase round-trip cost of travel for these travelers by an average of 5% and result in a fall in transfer passenger numbers of between 15-20%. The industry’s overall contribution to GDP would fall by USD 17-23 million and 1,200-1600 jobs would be at risk. In addition, the sectors contribution to public finances would fall by USD 14-18 million.
Full report (pdf)

Impact analysis of taxation proposal: Sweden
Assessment of demand and wider economic impacts of proposed passenger taxation increases in Sweden.
Full report (pdf)

Impact of a tax on foreign visitors to Chile
Imposing a tax on foreign arrivals to Chile by air would increase the cost of travel for these visitors by approximately 1.7% and result in a decrease in foreign visitor arrivals by air of approximately 2%.  The industry’s overall contribution to GDP would fall by USD 37 million and 1,000 jobs would be at risk. In addition, the sector’s contribution to public finances would fall by USD 8 million.
Full report (pdf)

Economic benefits of reducing fuel costs in Ghana
High costs for aviation fuel in Ghana has limited air connectivity and risks contributing to a further deterioration of air links as evidenced by the exiting of some long-haul carriers from this market.  Three price reduction options were identified where revenue generation from the sale of aviation fuel would result in relative and absolute peaks.
Full report (pdf)

Impact of aeronautical tariff Delhi Airport
New tariffs determined by AERA based on the shared till inflation – X price cap model would impose an increase in travel costs of 4.9 percent for domestic and 7.8 percent for international in the first year and will lower demand. This will create significant negative economic impacts for the travel and tourism industry as well as the local economy.
Full report (pdf)

Economic benefits of reducing fuel taxes in the Dominican Republic
Fuel taxes add US$76 million to the cost of fuel uplifted in the Dominican Republic. This adds 16.4% to the cost of fuel, damaging the competitiveness of the travel and tourism sector. Abolition of these taxes would reduce travel costs 3.1%, boost tourist arrivals 174,000, add US$355 million to GDP and support 25,000 new jobs.
Full report (pdf)

Analysis of UK APD proposals
IATA analysis of proposed changes to UK Air Passenger Duty indicates they would be positive for the broader economy and address inequities of the current system.
Full report (pdf)

Impact of proposed Iceland departure tax
Iceland’s proposed new air passenger departure tax averaging ISK 245 or € 1.53 per departure would add 0.3% to the cost of the average return journey. We estimate that over 4,000 tourist arrivals would be diverted to other destinations.
Full report (pdf)

Impact of proposed German departure tax
The imposition of a tax of €8 for short haul, €25 for medium haul and €45 for long haul passengers departing from German airports would add 3.6% to the cost of air travel for businesses, tourists and international visitors in 2011.  Fewer passenger departures will reduce German airport and airline revenues as well as broader business and tourism activity.
Full report (pdf)

Analysis of the impact of a new rise in UK air passenger duty
The increase in APD would raise the cost of travel from the UK by 2.4% in 2010-11. But long-haul travel will be more severely affected. The effect of raising APD will adversely impact not only the aviation industry – with £700 million of revenues lost - but also will cause economic damage to the wider UK economy.
Full report (pdf)

UK APD Increase
Climate benefits of 53 million versus GDP losses of 400 million plus losses to air travellers suggest this policy has not been put to a cost-benefit test. It may provide the Chancellor with an extra 1 billion in revenues and enhances his green credentials but it makes little economic sense.
Full report (pdf)

Impact of reducing crown rents on Toronto Pearson International Airport
The fiscal impact of the proposed reduction in crown rents of an average C$57.6 million a year would be offset by the extra C$62 million in tax revenues generated from the economic activity associated with the additional airport passengers. There would also be wider economic benefits including an estimated additional C$300 million in business revenues, 3000 jobs and C$80 million wage income in the southern Ontario economy.
Full report (pdf)

European Aviation Taxes
Airline passengers are already highly taxed in Europe. IATA estimates that the tax burden was at least 5.9 billion in 2004.
Full report (pdf)

The cost of EU regulation
The annual cost to EU airlines of the regulations imposed on them in Europe is estimated to be at least 5.9 billion. Since 2001 this financial burden has risen by more than 2.5 billion.
Full report (pdf) 

Aviation taxes and charges
Evidence from Europe demonstrates that aviation is not under-taxed compared to other modes of transport, once payments for the cost of infrastructure are taken into account.
Summary report (pdf)
Full report (pdf)

 

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