Dutch Government May Change Flight Tax Proposal

by Ulrika Lomas, Tax-News.com, Brussels

07 March 2008

The Dutch government is reportedly ready to modify a controversial environmental tax to be levied on airline tickets, following strong opposition from the aviation industry.

According to Dutch newspaper Het Financieele Dagblad, the Ministry of Finance and the Ministry of Transport are examining proposals to base flight taxes on the size and type of aircraft used, rather than levy a flat rate on tickets as is currently proposed.

The report claimed that the ministries have recently held talks with the aviation sector regarding the new proposals, and that the results of these consultations will be announced in May, with any new flight taxes to be introduced in 2009.

The Dutch ticket tax, ostensibly aimed at cutting aviation carbon emissions, is scheduled to come into force on July 1st, 2008. It will add EUR11.25 to the cost of short-haul journeys of less than 2,500km, and EUR45 to the cost of tickets for long-haul flights.

However, the proposal has excited strong opposition from the airline and travel industry, and a group of companies including Schiphol Group, the Dutch travel bureau association ANVR, the Board of Airline Representatives in the Netherlands (Barin) and Ryanair are challenging the new law in the courts.

The proposal has also been condemned by the International Air Transport Association (IATA), which believes that the passenger tax breaches resolutions of the International Civil Organisation (ICAO), and the Chicago Convention on International Civil Aviation.

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