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Dutch Aviation Tax

European Low Fares Airline Association Newsletter Issue 25 - 6 Feb.08

The Dutch government decided last year to impose an “environmental” tax on all airline tickets, with the exception of transfer passengers and cargo. On 18 December 2007 this proposal was adopted by the parliament, and the tax will be effective as from 1 July 2008.

In response, the Board of Airline Representatives in the Netherlands (BARIN) will be taking the Government to court, since it believes that the proposed tax contravenes an international aviation treaty – the so-called Chicago Convention. The hearing is set to take place on 5 March 2008 in The Hague.

The Association of Dutch tour operators and travel agents (ANVR) will also start proceedings before the tax court on the basis that the proposed tax breaches the principle of equality.

Maastricht airport launched another challenge of the tax, referring to its incompatibility with the Chicago Convention and the EU State aid rules.

ELFAA acknowledges that aviation contributes to Greenhouse Gas emissions, aviation’s share of global CO2 emissions being assessed at 1.6% in the Stern Review. ELFAA has to date supported the
proposed inclusion of aviation in EU ETS as the correct market mechanism to address this contribution.

ELFAA’s support for ETS has, however, always been subject to the design of the scheme being such as to permit of affordable, environmentally-sustainable growth for aviation and the economies of the EU,and reward good environmental performance and penalise bad. If aviation is included in EU ETS, ELFAA believes there to be no environmental justification the continuation, of other instruments such as taxation.

Revenues from any environmental taxation levied on aviation, pending its inclusion in EU ETS, should be ring-fenced for environmental research to reduce aviation emissions. To be environmentally effective, any such taxation should be based on emissions per flight and not per passenger, as proposed by the Dutch Government. The UK Government is, in fact, currently consulting on just such a change to UK Air Passenger Duty.

The Dutch Government’s proposed exemption of transfer passengers and cargo – which together
account for some 60% of air traffic in the Netherlands – has no environmental logic, transfer journeys resulting in two take-offs and landings – the stages of a flight at which aircraft performance is least environmentally efficient

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