ICC Document & publication

Taxes on international aviation: a 1997 update

The ICC will continue to work with passengers, airlines and interested aviation organizations to bring to light the fiscal burdens imposed on the industry and to urge that present air transport taxation policies be overhauled.

In 1992, the ICC approved a policy statement “Taxes on International Aviation: The Business Traveller’s View”, which expressed serious concern about the proliferation of taxes imposed on airlines and users. The statement contained a number of recommendations and concluded that “high taxes on airlines and airline tickets are incompatible with the freer movement of goods and services and have the twin effects of increasing travel costs and reducing demand”.

Despite similar expressions of concern by the ICC, the International Civil Aviation Organization (ICAO), the International Air Transport Association (IATA), the World Travel & Tourism Council (WTTC) and individual airlines, the tendency by governments to levy more and more taxes on air transport has not diminished. In fact it has accelerated; the 1992 ICC statement pointed out that IATA had isolated some 650 individual air transport taxes in around 200 countries. In early 1996, the same IATA list contained a total of 1,087 entries for taxes and fees. A survey conducted by the WTTC in late 1996 showed that of 52 destinations surveyed, some 38% had raised taxes on travellers in the preceding six months, and 85% of those tax increases involved air passenger levies.

Because the financial and regulatory environment has considerably changed since the ICC last spoke out on the subject, the ICC Air Transport Commission feels compelled to restate and reinforce the points it made in its 1992 paper.
It should be noted that concession charges for the use of air transport facilities do not fall within the purview of this paper. But others – including stamp taxes, ticket taxes and the like – are forms of compulsory contributions to the support of governments, the receipts for which are not used for air transport-related services. In addition, proposals being discussed in the EU to impose VAT on airline tickets and a tax on kerosene, though not the focus of this paper, are also highly troubling and will impact on the European air transport industry’s competitiveness.

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