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Swiss Tax To Benefit Aviation

by Ulrika Lomas, Tax-News.com, Brussels

22 September 2010


Switzerland’s Federal Council has recently unveiled details of how the product of the tax levied on kerosene is to be distributed within the aviation industry.

According to the Swiss Federal Administration, following the popular vote that took place in Switzerland in November last year, the proceeds of the kerosene tax will now be made available for use within the Confederation’s aviation industry.

Consequently, the Federal Council has proposed that half of the sum be allocated to benefit safety, and that the remainder of the tax be distributed equally between measures designed to benefit the environment and measures designed to protect against terrorism. The Federal Council has therefore submitted to parliament an amendment to the law pertaining to the use of the tax on mineral oils.

On November 29, 2009, the Swiss people accepted a modification to Article 86 of the country’s constitution by a comfortable majority, enabling the government to allocate the product of the kerosene tax to aviation. Up until now, the government and parliament allocated around CHF40m (EUR30m) of the annual tax revenues to road safety, while the remaining CHF20m (EUR15m) flowed directly into the federal budget.

Noting that kerosene tax is imposed on both domestic flights in Switzerland and on private flights, and that commercial cross border flights are exempt, the federal administration states that the latest decision is expected to release between CHF40m and CHF50m per year for the aviation industry.

Emphasizing that application of the new constitutional measures requires modification to the law pertaining to the use of the tax on mineral oils, the Federal Council has therefore proposed in its message addressed to parliament that the proceeds of the tax are distributed as follows:

  • Half of the sum is to be used to promote a high standard of technical security within the industry, such as, for example, financing air navigation services on regional aerodromes or accident prevention programmes;
  • A quarter of the proceeds are to be allocated to measures designed to reduce noise pollution or emissions caused by air traffic;
  • A quarter of the product is to contribute to measures designed to protect air traffic from criminal acts. These measures may include both passenger and luggage checks.

The proposal provides that the Federal Council may temporarily deviate from this formula if deemed necessary. Allocation of the contributions is the responsibility of the federal office of civil aviation (OFAC).

TAGS: environment | tax | law | aviation | budget | Switzerland

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