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Dutch Ticket Tax Could be Scrapped In 2012

by Ulrika Lomas, Tax-News.com, Brussels

02 September 2008


It has been suggested that the controversial tax on flight tickets introduced this year by the Dutch government could be scrapped in 2012 when the European Union emissions trading scheme (ETS) is brought into being.

According to a report in Tuesday’s edition of the Dutch daily Financieele Dagblad, David Batchelor, a Policy Officer in the European Commission's Aviation Safety and Environment Unit, told a conference in Amsterdam that the EU's ETS will effectively render redundant measures such as flight taxes at the national level.

"If the ETS is in place there are no more arguments for national tax measures to be kept," he was quoted as observing. However Batchelor conceded that the EU does not necessarily have the legal authority to strike down unilateral aviation taxes.

When added to increases in fuel surcharges, the ticket tax has added a significant amount to the cost of flying from the Netherlands, and passengers are reportedly paying about 25% more this year compared to last as a result.

The Dutch national carrier, KLM, has naturally borne the brunt of the corresponding dip in demand, but is now resigned to charging more for its tickets after the failure of the country's airline industry representatives to have the tax legally annulled.

KLM director Peter Hartman told the Dutch newspaper Volkskrant earlier in the summer that the ticket tax could cost the airline up to one million passengers this year, and that demand was already dropping dramatically, especially for flights with KLM's low-cost carrier Transavia.

"Cost-conscious customers are looking for alternatives abroad. We’ve have warned about this and now it is happening," he was quoted as saying.

The ticket tax, ostensibly an environmental measure, took effect on July 1, 2008, and adds a surcharge of EUR11.25 (USD16.30) to the cost of a short-haul flight and EUR45 to flights longer than 2,500 km.

An appeal court ruled earlier this year that the tax was not in conflict with European and international law, despite assertions from the airline industry that it breaches key aviation agreements such as the Chicago Convention on International Civil Aviation.


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