The International Air Transport Association (IATA) expressed its extreme disappointment with the announcement of a NOK80 (plus VAT) air passenger tax on departing flights. Air links to, from and within Norway carried nearly 29 million people last year. More than 100,000 jobs, and NOK120 billion in GDP is supported by commercial aviation in Norway, and the tax will only serve to damage tourism and the Norwegian economy. The tax, due to commence from April 1 2016, is based on unpopular and unsuccessful passenger taxes that have been introduced in a small number of countries – and later withdrawn in some, e.g. in Ireland and the Netherlands.

As a measure to raise revenue, the tax will be counter-productive. Aviation is an engine for driving economic growth. The long-term productive capacity and efficiency of the economy is enhanced by strong air connectivity, which in turn leads to a larger tax-take for the government.

“This passenger tax is a nonsense and will fail on every measure. Norway covers a very large territory and its major population centers are spread out. Aviation is the best – sometimes the only – way to connect these communities. It makes little sense to constrict air transport when it can add so much to Norway’s economy and society,” said Rafael Schvartzman, IATA’s European Regional Vice President.

If the intent of the tax is to account for Norway’s share of the 2% of global CO2 that aviation is responsible for, then this is a blunt instrument which will have practically no effect. Moreover, many passengers face being triple-taxed. Domestic travelers already pay a domestic pollution tax and the European Emissions Trading Scheme. Norway should instead work to ensure the success of the negotiations for a global measure for aviation to achieve carbon-neutral growth from 2020.

“It is particularly alarming for the industry that this proposal has emerged without warning, and with no consultation. This is counter to every regulatory best practice and out of character for Norway, which previously has held a reputation for good governance. April 1st is a traditional date for practical jokes, but imposition of this tax next year would be no laughing matter for millions of Norwegian air travelers and the many businesses that rely on air links,” said Schvartzman.