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Aviation supports trade, employment, and economic growth.

Since the 1980s, many Governments have required the airline industry to collect taxes, fees, and charges from consumers on their behalf. These amounts have increased from less than USD 1 billion annually to more than USD 136 billion in pre-pandemic years. That’s the equivalent of 45% of the industry’s GVA – Gross Value Added, which is the corporate-level equivalent to GDP –, paid to governments.

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This results in a significant administrative and financial burden for the airline industry, and higher costs for consumers – yet the money collected rarely goes to helping the aviation industry become more safe, secure, or sustainable. Nor is it put into modern infrastructure or digital processes to speed up customs and border controls.

Tax of the Month

tax-of-the-month

In March 2024, we focus on the proposals to amend UN Model Convention Article 8 (pdf)
> IATA's policy on direct taxation

IATA’s activities include:

  • Ensuring that new and existing taxation measures are fairly applied and adequately consider the economic and social ramifications
  • Advocating against measures that result in double taxation
  • Advocating against taxation measures that unjustly target the industry, where the resulting tax revenues are not reinvested in air transport related services and infrastructure.

The International Civil Aviation Organization (ICAO) position on governments taxing aviation

Over the years, the ICAO Council has undergone a number of revisions to the policies on taxation of international air transport, and has adopted a consolidation Council Resolution: ICAO's Policies in the Field of Air Transport (Doc 8632, 3rd Edition, 2000 pdf).

Doc 8632 makes a conceptual distinction between a charge and a tax: i) a charge is a levy that is designed and applied specifically to recover the costs of providing facilities and services for civil aviation; and “a tax is a levy that is designed to raise national or local government revenues which are generally not applied to civil aviation in their entirety or on a cost-specific basis”.

Considering that the recommendations in the ICAO policies have been developed by major international conferences, there is a strong moral obligation for all ICAO Member States to ensure that any imposed taxes and charges conform to the policies and philosophy set out in the ICAO policies. Therefore, ICAO Member States are also urged to avoid imposing discriminatory taxes on international aviation, as well as avoid double taxation in the field of air transport.

Policy Areas - Papers and Positions