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MENA Airlines Concerned About Rising Tax Burden

by Ulrika Lomas,, Brussels

02 December 2016

Aviation industry players in the Middle East and North Africa region are concerned about rising taxes and charges, says the International Air Transport Association.

The taxation of the aviation sector in the MENA region was one of the four items on the agenda at the Arab Air Carriers Organization's 49th Annual General Meeting in Casablanca, Morocco, alongside infrastructure, consumer protection regulations, and security.

According to the International Air Transport Association (IATA), about USD700m in extra costs were imposed on the industry in 2015 alone. It called for "cooperation to reverse unprecedented rises in taxes and charges."

"Every dollar that a passenger spends in the region creates jobs and spreads prosperity. And every dollar collected in taxes or charges is an incentive for travelers to go elsewhere," said Alexandre de Juniac, IATA's Director General and CEO, in his opening remarks at the meeting.

"A low cost structure is a key component of the region's success, particularly in the Gulf," he added.

IATA says tax is one of the major obstacles to growth in the global aviation sector, and frequently criticizes governments for introducing taxes that "unjustly target the industry," especially in cases where tax revenues are not reinvested in aviation infrastructure and related areas. "Unwarranted or excessive taxation on international air transport has a negative impact on economic and social development," it says.

According to IATA, airlines and their customers are expected to generate USD118bn in tax revenues in 2016, equivalent to 45 percent of the industry's gross value-added.

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