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German Air Passenger Tax Under Fire From Economy Minister

by Ulrika Lomas, Tax-News.com, Brussels

24 August 2017


German Economy Minister Brigitte Zypries has said that Germany's air passenger tax is damaging the country's aviation industry and should be scrapped.

Zypries's comments made in a recent interview with Germany daily Handelsblatt, and followed the demise of German regional airline Air Berlin, which recently declared bankruptcy.

"Airlines and unions have long criticized the tax as disadvantaging German companies. Its abolition would strengthen German airlines' competitiveness in Europe," she said.

Germany's flight tax was introduced in 2011 in an effort to cut carbon emissions. It is levied on both domestic and international airlines at rates of EUR7.50 (USD8.84), EUR23.43, and EUR42.18 depending on the distance traveled, and generates about EUR1bn in revenue each year. The tax was initially EUR8 per passenger for short-haul flights up to 2,500 kilometers, EUR25 for medium-haul flights of up to 6,000 kilometers, and EUR45 for long-distance flights, but these rates were reduced from January 1, 2012.

The International Air Transport Association (IATA) has also urged the German Government to remove the "counter-productive" tax on flight tickets to boost the competitiveness of the country's aviation industry.

Opening last year's World Air Cargo Symposium in Berlin, Tony Tyler, IATA's then Director General and CEO, said that aviation supports over one million jobs and contributes EUR77bn to the German economy. However, he warned that these benefits are under pressure because of "onerous taxes" and capacity constraints.

TAGS: tax | aviation | Germany | Europe | Economy

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