15th August, 2013
‘Transport and Environment’ a European environmental campaigning group, has commissioned a report which concludes that tax breaks to the aviation industry cost EU states €39 billion every year.
According to the study, €32 billion a year is lost due to airlines’ exemption from paying fuel taxes, and another €7 billion goes missing because of VAT exemptions on international flight tickets.
T&E’s Aoife O’Leary said “International airlines are like flying tax havens inexplicably exempted from paying the basic EU taxes every EU citizen and company is obliged to. Cash-strapped EU governments should seize the opportunity, collect this low-hanging fruit and generate revenues badly needed to cover their budget deficits.”
The message has been reinforced by a senior UN official. Writing in the China Daily last month, Achim Steiner, director of the United Nations Environment Programme, said airline tax breaks “give air transport an unfair advantage over rail and road, and offers less incentive to aircraft designers and operators to accelerate a transition to ever-more fuel-efficient planes.”
In the UK, tax breaks to aviation has been estimated to be worth £10 billion per year when the sector is compared with tax on road vehicles – a figure confirmed by the Treasury.