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Japan May Cut Aviation Fuel Tax

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

28 July 2010


In a bid to support its ailing domestic airline market, Japan's Ministry of Land, Infrastructure, Transport and Tourism (MLITT) will attempt to push through reductions in aviation jet fuel taxes.

It is estimated that such cuts would reduce the USD825m the government currently receives from fuel tax by USD115m. The tax has been fixed at JPY26,000 (USD300) per 1,000 litres since 1979.

The main domestic carriers, All Nippon Airways (ANA) and Japan Airlines (JAL), have experienced huge losses on their domestic flights in 2008 and 2009, and JAL is still under bankruptcy protection.

The MLITT could also provide further support by reducing landing fees at state-owned airports which generated almost USD1bn in the last financial year. Earlier this year while visiting Japan, IATA Director General, Giovanni Bisignani, said at a news conference that landing fees at Narita and Haneda were too high by international standards, damaging their growth potential.

TAGS: tax | aviation | fees | Japan

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