![]() Eurocontrol estimates that traffic will reach 92% of pre-COVID levels in 2023 and a full recovery by 2025. Unless action is taken, the tax gap will increase by 38% by 2025, as the sector is set to grow in coming years. ![]() How can they justify to citizens that drivers pay more taxes than Air France and Lufthansa for their fuel?” But governments are unwilling to touch their precious national carriers. Airlines are edging close to record profits this year, whilst spewing dirty fuels in our skies. Jo Dardenne, aviation director at T&E, explains: “Europe is bleeding money by not taxing the aviation sector. Of the €34.2 billion gap, €20.5 billion should have been paid by carriers in fuel taxes and carbon pricing. Ticket taxes and VAT are imposed on passengers, whereas fuel taxes and carbon pricing are directly attributable to airlines. The study differentiates between charges on passengers and on airlines. Europe lost out on €2.4 and €2.3 billion of revenue from these airlines’ activities. Although France, Germany and the UK levy a ticket tax, their low levels of ticket taxation aren’t able to fill the gap.Īir France and Lufthansa are the two biggest contributors to the tax gap in Europe, due to the size of their activity. 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. The UK and French governments would have cashed in an extra €5.5 and €4.7 billion if aviation was taxed adequately. ![]() The sector pays no kerosene taxation, little to no ticket taxes or VAT and a carbon price on intra-European flights only. It compares these revenues with those that were actually raised in a year. The analysis looks at the revenues that should have been raised from air travel pricing if the sector did not benefit from exemptions. This €34.2 billion could pay for 1,400 km of high-speed rail infrastructure – equivalent to the distance from Hamburg to Rome. 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.
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