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  1. Why govts taxing aviation sector punitively: IATA

Why govts taxing aviation sector punitively: IATA

Global airlines' body International Air Traffic Association (IATA) today asked the government as to why the aviation sector was being taxed "punitively" like that of alcohol or tobacco industry, saying such fees were weakening its ability to be a force for good.

By: | New Delhi | Published: June 2, 2016 7:37 PM
Aviation stocks, Indigo, interglobe aviation, spice jet, jet airways Global airlines’ body International Air Traffic Association (IATA) today asked the government as to why the aviation sector was being taxed “punitively” like that of alcohol or tobacco industry, saying such fees were weakening its ability to be a force for good. (Representative Image: Reuters)

Global airlines’ body International Air Traffic Association (IATA) today asked the government as to why the aviation sector was being taxed “punitively” like that of alcohol or tobacco industry, saying such fees were weakening its ability to be a force for good.

Noting that there were “nearly 2,000 government-imposed aviation taxes and charges” in its data base-—of which 230 were statutory taxes imposed on tickets, IATA said “the number seems to grow with each government budget cycle, most increases are incremental, but they add up.”

“It is not unusual for the net impact of government taxes and charges to reach 20 per cent or more of the cost of travel—nearly four times the airlines’ average net margin. Airlines are a force for good creating jobs and spreading wealth. Why then are we taxed as punitively as the ‘sins’ of alcohol and tobacco?” asked IATA Director General and CEO Tony Tyler.

Addressing the IATA annual meet in Dublin, Tyler said, “Many governments are simply not doing the maths” and creating an environment for the aviation sector to function as any other industry, generate jobs and enhance connectivity.

Tyler maintained that reduction or abolition of most taxes would lead to “a net positive benefit for government finances, national economies and individuals”, an IATA release said.

Referring to heightened regulations in the aviation sector, Tyler said, however, “not all regulations have the same galvanising clarity of focus. Passenger rights rules, for example, often seem more intent on penalising airlines than helping passengers enjoy the benefits of efficient travel.”

Stressing that the regulations must stand up to rigorous cost benefits, Tyler said “as a force for good, we need smarter regulation, clearly defined rules easily implemented to solve real issues while respecting global standards. Regulation must stand up to rigorous cost-benefit analysis,” Tyler said.

He also referred to aviation safety and security issues and mentioned recent incidents including those involving aircraft of EgyptAir, Malaysian Airlines and others, saying “we face real threats. Government and industry must be nimble, share information, use global standards and keep a risk-based mindset when developing counter-measures.”

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