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Germany's Flight Ticket Tax Opposed

by Ulrika Lomas, Tax-News.com, Brussels

20 October 2010


Within the ranks of Germany’s ruling Free Democratic Party (FDP), there are increasing calls for the government to replace its plans for the introduction of a highly controversial airline tax with plans to levy a tax on aviation fuel.

Urging the coalition to impose a kerosene tax on all aircraft, Deputy Chairman of the FDP’s parliamentary group, Jürgen Koppelin, emphasized that the introduction of such a tax would not only be fair, given that it would also include air freight, but that it would also serve to minimize bureaucracy.

According to Koppelin, a kerosene tax could yield in the region of EUR300m a year in additional revenues for the state. This figure is, however, considerably less than the EUR1bn that Germany’s Finance Minister Wolfgang Schäuble expects to generate from the ticket tax.

Alluding to the latest figures released by the Federal Statistical Office, which show strong economic growth for the second quarter of 2010, the FDP’s transport expert Torsten Staffeldt has called for certain measures contained in the coalition’s austerity package to be relaxed, particularly those that place an additional burden on German industry. The airline tax could be removed or at least reduced, Staffeldt explained, given the good economic climate and unexpected results.

Among key fiscal measures contained in the government’s EUR80bn ‘future package’ (Zukunftspaket), designed to consolidate the public finances thereby promoting sustainable growth, is the introduction of a new airline tax levied at EUR8, EUR25, or EUR45 per passenger, depending on the destination, and due to apply from 2011.

German airlines have, however, fiercely opposed and criticized the government’s plans from the outset, warning of competitive disadvantages for the country's industry.

TAGS: environment | tax | aviation | environmental tax | Germany

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