- Does Aviation Pay its Way? 2013_07_VAT Fuel Tax Loss One Pager_FINAL.pdfPDF, 142.4 KByte
The briefing, “Does Aviation Pay its Way?” concludes by saying:
The lack of fuel tax and VAT income means that in total EU governments (and therefore its citizens) are missing some €39.1bn a year in tax revenues –this works out to almost €80 for every man, woman and child across the EU. More importantly, the shortfall must be made up in other taxes. Other than VAT, the greatest source of government revenues in the EU is labour taxes. Rather than raising labour taxes to fund the aviation subsidies, lowering them could create 11,000 jobs for every €1bn in lower labour taxes. 6 Subsidising the aviation industry this way in a time of economic crisis and austerity with youth unemployment rates soaring to unprecedented levels is obscene and senseless. Moreover, many of the carriers benefiting are based in foreign countries so we are subsidising travellers and companies outside the EU.
The CE Delft paper concludes:
If the EU decided to introduce VAT on air travel in all countries or fuel taxation in the aviation sector, it would raise tax revenues of billions of Euros per year:
Assuming an average 20% VAT and an abolishment of other aviation taxes, additional revenues are estimated to be € 7.1 billion.
Assuming a fuel tax of € 330-530 per m3 , revenue estimates amount € 20 to € 32 billion.
Assuming an average 20% VAT on jet fuel, revenues are estimated to be € 10 billion (based on current fuel prices) up to € 14-16.5 billion (prices plus fuel tax). However, where VAT was imposed on all inputs and outputs in the aviation industry this would not be additional but rather could be deducted by the airlines against the VAT receipts from airline tickets