Every hour European governments lose out on €4 million in aviation taxes

(Transport and Environment, 12 Jul 2023) The aviation sector benefits from unjustified tax exemptions that, if left unaddressed, will rise in value by 38% in the next three years.

European governments lost out on €34.2 billion in revenue last year due to very low levels of taxation in the aviation sector, a new study by green group Transport & Environment finds. This €34.2 billion could pay for 1,400 km of high-speed rail infrastructure – equivalent to the distance from Hamburg to Rome[1].

The analysis looks at the revenues that should have been raised from air travel pricing if the sector did not benefit from exemptions. It compares these revenues with those that were actually raised in a year. This is defined as the ‘tax gap’. The sector pays no kerosene taxation, little to no ticket taxes or VAT and a carbon price on intra-European flights only.

The UK and French governments would have cashed in an extra €5.5 and €4.7 billion if aviation was taxed adequately. The four European countries where the tax gaps are the largest are the UK, France, Spain and Germany, mainly reflecting the size of their aviation sectors. Although France, Germany and the UK levy a ticket tax, their low levels of ticket taxation aren’t able to fill the gap.

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Transport and Environment, 12 Jul 2023: Every hour European governments lose out on €4 million in aviation taxes