The International Air Transport Association (IATA) has discovered nearly 2000 government- imposed aviation taxes and charges in their data base -of which 230 are statutory taxes imposed on tickets, outgoing Secretary-General of the body, Tony Tyler, has said.
He disclosed this at the just concluded IATA’s 72nd Annual General Meeting in Dublin, Ireland.
The IATA boss also bemoaned the high taxes imposed on aviation sector, saying the phenomenon militates against the growth of the industry. He lamented that the number seems to grow with each government budget cycle, stressing that Norway is the latest country to add to the industry’s tax burden.
Tyler stated that most increases are incremental, adding that it is not unusual for the net impact of government taxes and charges to reach 20 per cent or more of the cost of travel, which he said, is nearly four times the airlines’ average net margin.
He reiterated that airlines are a force for creating jobs and spreading wealth, asking, “Why then are we taxed as punitively as the sins of alcohol and tobacco”?To him, many governments are simply not doing the mathematics, hinting that the UK government pockets £3 billion a year from its Air Passenger Duty (APD).
Pricewatercooper estimates that the UK economy would be $18 billion more prosperous if the tax were abolished, adding, “One can only wonder why the tax still exists.” Meanwhile, Ireland abolished its departure tax in 2014.
The industry there is growing so fast that Dublin now needs a new runway to take advantage of the jobs and economic growth that aviation is delivering.
Tyler noted that IATA’s arguments for low taxes hinge on a net positive benefit for government finances, national economies and individuals.
Nigeria’s air passenger taxes are among the highest in the world, according to a new study by international accountancy network, UHY. According to the report, Nigeria imposes a levy of $20 on both short and long haul flights and long haul flights leaving the country through airport tax, though below the global average of $23 on a short haul flight and $60 on a long haul flight, which excludes many countries that do not tax flying at all.
UHY explained that these additional costs damage tourism, penalise SMEs trying to expand overseas, hamper remote regional cities and chip away at labour mobility.
Although taxes on flying are often billed as ‘green taxes’, it noted that globally, it is exceptionally rare for the revenue they raise to be ring-fenced for environmental protection projects.
Taking a comparative study of passenger charges on an economy class flight by 21 governments around the world,
UHY said that the most expensive taxes are for long haul flights departing from a Russian airport, where unlike many other countries, airline tickets are subject to sales taxes.
The highest taxes of any G7 economy are in the United States, which imposes $23 worth of taxes on a short haul. Within the EU, it observed that the United Kingdom still has the highest flight taxes with an adult holder of economy short haul ticket flying from a UK airport paying $20 in tax.
For a first or business class ticket, the tax paid goes for as high as $41. The Vice President, IATA (Africa), Raphael Kuuchi also decried the high taxes imposed on air travel in Africa, saying the taxes are above global standard. He noted that if not tackled, the phenomenon militates against the growth of the industry.