Australian Travellers Suffering Under Increased Tax Burden

by Mary Swire, Tax-News.com, Hong Kong

08 November 2001

According to a report released by the Australian consumer organisation Infochoice, domestic and international airfares have increased by up to 40% in some cases in the wake of the September 11th terrorist attacks.

The Australian government has recently introduced a raft of new taxes to cover increased insurance and security costs, and a new 'Ansett tax' has been introduced to fund the entitlements of retrenched Ansett employees. Infochoice revealed that it was domestic discount flyers who were most likely to suffer as a result of the new charges, which are levied at a fixed rate, rather than a percentage.

Ian Hamilton, a spokesman for Infochoice, explained: 'The impact on domestic passengers is greatest because the flat rate charges amount to a higher proportion of the overall cost of the air fare.'

In addition to increased insurance and security costs and the Ansett tax, air travellers in Australia must also pay noise tax, departure tax, and GST. However, it is this last which really gets the consumer website's goat: 'Even worse, we are now paying taxes on our taxes,' it argued in the report, explaining: 'The GST has been levied on airfares since its general introduction in July 2000. However, it is not only levied on the basic fare set by the airline but also on most of the other taxes and charges that apply.'

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