Swedish government commission proposes climate tax (about £6.50 – £29) on air fares

A commission appointed by the Swedish has recommended that airlines operating in Sweden should pay a tax of between 80 and 430 Swedish crowns ($9-47 or £6.80 to £29) per passenger per flight to compensate for carbon emissions. One the levy is instituted, the cost of a domestic flight would rise by 80 crowns and an international flight by 280 to 430 crowns (£24 – 29), depending on the distance of the flight.  Currently in Sweden airlines pay VAT of 6% on domestic flights while international flights are exempt from VAT.  Predictably, the centre-left government’s plans for an airline tax have been criticised by opposition parties who say it would do little to reduce CO2 and would harm the airline industry, by very slightly reducing demand.  The government is expected to incorporate a form of the proposal, possibly amended, within their next autumn budget in October 2017. The Swedish commission proposed that the tax come into force on January 1, 2018 and it would be expected to raise around 1.75 billion Swedish crowns  (about £150 million) per year.  Many other countries have charges for flights, at different levels, and for different reasons. These include Australia, Norway, Germany, Austria, France, Spain, Doha, Abu Dhabi, Sharjah and Hong Kong.  Details below.



Swedish government commission proposes airline climate tax

30.11.2016 (Reuters)

A government-appointed commission recommended on Wednesday that airlines operating in Sweden should pay a tax of between 80 and 430 Swedish crowns ($9-47 or £6.80 to £29) per passenger and flight to compensate for climate pollution.

One the levy is instituted, the cost of a domestic flight would rise by 80 crowns and an international flight by 280 to 430 and crowns, depending on the distance of the flight.

Under current rules in the Nordic state, airlines pay value-added tax of 6 percent on domestic flights while international flights are exempt from VAT.

The centre-left government’s plans for an airline tax has been criticized by opposition parties who say it would do little to reduce carbon dioxide and would harm the airline industry.

The government is expected to incorporate a form of the proposal, possibly amended, within their next autumn budget in October 2017.

The commission proposed that the tax come into force on Jan. 1, 2018 and said it would be expected to raise around 1.75 billion Swedish crowns per year.



See also

Australian Passenger Movement Charge to rise from $55 to $60 for any flight from Australia

In Australia the Passenger Movement Charge (PMC) was established in 1995, replacing Departure Tax (which began in 1978). It has been at he level of $55 (Australian dollars) for anyone aged over 12 travelling outside Australia (unless they are in transit through Australia). The relevant Senate committee has been investigating the proposal to raise it $5 to $60, and will produce its report shortly. $60 per person (about £36.50) is the cost for any length of trip, economy or premium class, for air travel or sea travel. It is administered by the Department of Immigration and Border Protection. The Australian PMC is considered to be the highest departure tax in the world, after the UK. The airlines, and IATA, naturally do not like the tax – let alone the tiny increase, and have complained how it cuts travel and could allegedly – they claim – damage the economy. As the charge is a flat rate, it is a higher proportion of short haul flights to Tasmania, than on long haul. IATA says the tiny rise might cut the number of international return flights to Australia by some 30,000 per year. “It will act as a brake on the Australian aviation sector,” IATA said, and they give estimates of up to $375 million for the national economy, and 3,800 more jobs if there was no PMC. IATA told the Senate committee that the PMC was “tax on tourism.”

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Assessment of proposal to cut APD by 50% in Scotland shows likely overall fall in revenue

An assessment of the Scottish Government’s plans to cut the rate of Air Passenger Duty (APD) shows that the aviation industry’s analysis has not accounted for the impact of a fall in domestic tourism. The 50% cut in APD proposed would have the effect of damaging the Scottish economy and reducing funding for public services. The report “APD Cut: A Flighty Economic Case” challenges claims that reducing APD by 50% will lead to sufficient economic growth to cover the short-fall in revenue from the tax cut. In reality, cheaper tickets will encourage more Scots to take cheap foreign trips. The amount of money they take out of Scotland on these extra trips is likely to be larger than the amount brought in. The inbound tourists with greater spending power than typical domestic tourists are the least likely to be sensitive to airline ticket prices. In a buoyant economy, the increase in outbound trips is likely to exceed the increase in inbound trips. The case for business growth due to an APD cut appears particularly weak as business flights are driven by need and time pressures rather than price. They are know to be price insensitive. There could also be a reduction in domestic tourism by Scottish people, who instead take cheap foreign breaks, so reducing employment in Scottish tourism.

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Norwegian government introduces approx €8.5 tax per air passenger on all flights

The Norwegian government will introduce an Air Passenger Tax, starting on 1st June 2016. It will be at the rate of a 80 Krone charge (around €8.64, £6.59, US$9.67) per person for both domestic and international flights. Exceptions of the tax include those under two years old and those transiting flights on the same airline. The airlines have, predictably, reacted with fury at being “defied” by the government. They say this tiny tax “threatens to reduce demand by 5%, equal to 1.2 million passengers a year,” and they say it could mean airlines might lose €150 million per year as a result. The airline lobby group, “Airlines 4 Europe” (whose members include EasyJet, Ryanair, Lufthansa, Norwegian Air Shuttle and International Airlines Group) is lobbying hard. They all completely ignore the inconvenient fact that air travel demand is artificially high, as it pays no VAT and no fuel duty. Those together amount to a massive annual subsidy (in the UK this is a net annual loss to the Treasury, even including takings from APD, of perhaps £9 blllion per year).  Several European countries do have a ticket tax, with the UK levels being the highest (Brits also fly more than most others). There are small charges in France, Germany and Austria. Ireland and the Netherlands scrapped theirs, due to airline pressure.


Middle Eastern airports now adding air passenger charges, to pay for airport infrastructure

As well as the UK charging Air Passenger Duty, Germany, Austria, France, Spain and Norway and others have a comparable charge.  Germany has the second highest charges in Europe after the UK with levels of around €7, €23 and €42 for different bands of countries. Norway now has a charge of about €8.50 on all flights.  But other airports else where in the world are increasingly charging.  Hong Kong has now started a charge, of around £14 – 16 depending on length of flight and class of seat, in order to pay for the 3rd runway. The charges may last till 2031 when the runway is fully paid for.  Now Middle Eastern airports have started to charge all passengers, to contribute towards the cost of the huge airport infrastructure. Dubai introduced a charge of around £7 for all passengers, except children under the age of two and transit passengers remaining on the same plane. Abu Dhabi also introduced the same fee as did Sharjah – all started on 30th June. Now Doha’s Hamad Airport says it will introduce a Passenger Facility Charge of about $10 for all departing passengers, together with transferring passengers who make a connection within 24 hours.  It will come into effect on December 1st.  Australia has had a Passenger Movement Charge since 1995 for any departing passenger on an international flights, at around £31.



Departing passengers will pay around £8 – 16 tax till perhaps 2031 to fund 3rd Hong Kong airport runway

Outbound and transit passengers will pay up to between a bout £8 and £16 (HK$ 90 -180) to fund the construction of Hong Kong airport’s third runway system from August 1st. Initial reclamation work for the project is scheduled to start on the same day. The airport construction fee for short-haul economy departing passengers will be HK$90, and in first or business class, HK$160. For long-haul passengers, the fee for economy will be HK$160 and first or business class HK$180. Short haul economy passengers will pay HK$70. The costs would remain at the same level, but continue till the runway is fully paid for, which may be till 2031. Meanwhile, People’s Aviation Watch, an organisation opposing expensive infrastructure projects at the airport, said a judicial review to challenge the environmental impact assessment report for the runway will be heard in court this July. They say the Airport Authority’s decision to charge the fees before any verdict on the start of the runway disregards the law. But in March opponents lost a bid to legally challenge the ability of the airport to charge for the runway. A total of five judicial review cases or appeals against the runway are being planned. The new runway is likely to increase CO2 emissions by about 50%, and create serious noise pollution for some areas.


Chancellor cuts rate of Air Passenger Duty for long haul (over 4,000 miles) flights from 1st April 2015

March 19, 2014

In the Budget 2014 the Chancellor has announced that rates of Air Passenger Duty (APD) are to be reduced for flights of over 4000 miles from London, from April 2015. Rates of APD will rise by the rate of inflation (RPI) during 2014. After 1st April 2015, distance bands for all journeys longer than 2,000 miles will all be lumped together. While the rate of APD during 2014 (from 1st April 2014) is £13 for a return trip below 2,000 miles (anywhere in Europe), and the rate for journeys of 2,000 to 4,000 miles in length is £69 – the rates from April 2015 will be £13 for the short flights, and £71 for all other distances. The rates of APD in 2015 for premium classes will be £26 and £142. Commenting on this retrograde move by the Chancellor, the Aviation Environment Foundation said it is a backward step environmentally and economically. Aviation is already massively under-taxed compared with the £10 billion that would be raised per annum if aviation wasn’t exempted from fuel taxes and VAT. APD was a means of redressing this problem but any cut means that taxes will have to be raised elsewhere to balance government spending. Long-haul flights contribute more greenhouse gases in absolute terms than shorter flights. It is therefore right that the duty is proportional to the distance flown and the associated emissions. Eliminating bands C and D breaks the link between environmental impacts and tax and breaches the principle of fairness.

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Rates of tax in some other countries:

CountryTax   Rate (long haul)
AustraliaPassenger Movement Charge  A$55 (US$43)
GermanyLuftverkehrsteuergesetz  All other countries €42.18 (US$46.35)
AustriaFlugabgabegesetz  All other countries €35 (US$38.50)
MexicoDerecho de No Inmigrante  Mex$294 (US$19.30)



Other countries that have air ticket taxes:


The table below shows a breakdown of the key charges levied by the state in four EU countries (all per departing passenger);


Air Transport Levy EUR 8.00


Civil Aviation Tax EUR 4.31

Solidarity Tax EUR 1.00

Airport Tax* EUR 12.00

National Surcharge EUR 1.25


Air Traffic Control Law EUR 8.00

Aviation Security Fee* EUR 5.24

United Kingdom

Air Passenger Duty GBP 13.00

France leads the way in the number of different taxes it levies on passengers, with four. The Airport Tax varies by airport, though outside of the main airports in France it is usually levied at EUR 12.00 per departing passenger. Taken together, these taxes make passengers departing from France the most heavily taxed in Europe.

The state levies two passenger taxes in Germany, a departure tax and a security fee. The departure tax does vary by distance, though for this analysis only the short-haul tax is required. The Security Fee varies by airport of departure, but is usually within the range of EUR 4.00 to EUR 7.00 per departing passenger.

Spain also has an air ticket tax, and France has a Passenger Solidarity Tax  https://www.airportwatch.org.uk/?p=2585



Tourists to Spain face extra airport tax

Spain has increased the amount of departure tax it charges.  The increase will be, on average, only perhaps 20% above the current level, but from the largest Spanish airports, it will be almost doubled. This will mean a rise of some €5 to €9 or so. The tax is charged to the airline, and they can choose whether to pass it on to the passengers – Ryanair certainly will get its passengers to pay.  The tax  is applied “retrospectively to customers who booked flights before 2 July 2012 and are travelling from 1 July onwards.  Spain is implementing drastic measures to try to slash its budget deficit to 5.3% from 8.5% in 2011.