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Morocco Dissuaded From Taxing Aviation

by Lorys Charalambous, Tax-News.com, Cyprus

20 January 2014


The International Air Transport Association (IATA) has encouraged the Moroccan Government to drop plans to levy a new tax on aviation, warning that the proposed charge may lead to a decline in revenues and hinder the local industry's development.

The Moroccan Government plans to introduce a tax, of MAD100 (USD12.2) on economy class tickets and up to MAD400 on first or business class tickets, for flights departing from Morocco on and after April 1, 2014.

IATA pointed out that Morocco had announced the tax after committing, at the ICAOs Sixth Air Transport Conference, to limit the air travel taxes to those that are directly used to finance infrastructure improvements. Revenues from the levy will be channeled into funding the promotional efforts of the Moroccan National Tourist Office.

In a letter addressed to the Moroccan Tourism Ministry, IATA said that the tax will significantly damage Morocco's competitiveness as a holiday destination. It estimates that the levy will increase air fare prices by about 2.2 percent, and tourist arrivals will decline by 2.3 percent as a result. Fewer visitors could mean revenues fall by about MAD1.1bn each year, IATA said, and a total of 13,000 jobs could be lost.

TAGS: Morocco | tax | business | aviation | tax rates

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