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Asian Airlines Lash Out At Western Tax Policy

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

08 November 2011


The Association of Asia Pacific Airlines (AAPA) has spoken out against the "ineffective regulation and excessive taxes and charges" of Europe and the United States, which it said are unnecessarily constraining the growth of the industry globally.

At the AAPA 55th Assembly of Presidents in Seoul, South Korea, on November 4, the region's industry leaders condemned recent policies by western governments including the EU's Emissions Trading Scheme (ETS), the UK's Air Passenger Duty (APD) and new passenger handling rules in the US.

In opening the Assembly, Andrew Herdman, AAPA Director General, said: “Rather than focusing on adding layer upon layer of new regulations, as well as additional taxes and charges, governments would do well to reflect on the fact that aviation can be a key contributor to economic recovery and job creation, led by travel and tourism.”

He added: "Unjustified new regulations, taxes and charges do untold damage to the economy, counteract innovation by the airline industry, harm the travelling public by making air travel less affordable and undermine air transport’s vital role in fostering social and economic development."

Focussing much of its criticism on the EU ETS, the Association warned that taxes dressed up as environmental measures could open an unwelcome can of worms in terms of international law and free trade:

“EU intransigence on the inclusion of foreign airlines within the EU Emissions Trading Scheme (ETS), without the consent of other governments, has triggered a global political backlash. A number of foreign governments are considering retaliatory political instruments, trade measures and sanctions targeting European interests, if the EU ignores such objections and proceeds with the EU ETS in its current form."

“[The] AAPA calls on the EU to scrap plans to include foreign airlines within the EU ETS, rethink its position and re-engage with the international community. [The] AAPA also strongly urges governments to work within the auspices of ICAO (International Civil Aviation Authority) towards an effective multilateral agreement on a global, sectoral framework on aviation and the environment, and to refrain from introducing duplicative measures, including the imposition of arbitrary taxes that deliver no real environmental benefit.”

"Airlines and the travelling public today bear the burden of numerous taxes and charges increasingly imposed by governments, with the travelling public often being unaware of the magnitude of such taxes or levies. A number of governments have imposed taxes or levies, such as the UK Air Passenger Duty, the German ecological tax on air passengers and the travel authorisation fees introduced by the US and Sri Lanka. Some governments are even considering the introduction of punitive or arbitrary taxes and levies on air passengers as political retaliatory instruments against similar measures being imposed by other governments."

"AAPA strongly urges governments to carefully consider the overall economic effects of putting further financial strain on the travelling public and on the aviation industry."

TAGS: environment | tax | air passenger duty (APD) | law | aviation | fees | travel and tourism | United States | regulation | trade | European Union (EU) | Europe

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