Israel Tax Authority Proposes New Tax on Flights
Translated & summarized from i24NEWS by baba
The Israel Tax Authority has proposed a new tax on departing flights, which could generate about 1.1 billion shekels annually. The tax would vary based on aircraft weight and flight distance, adding an estimated 4-5% to ticket prices. This measure aims to address the environmental and health costs associated with air travel, which are currently largely untaxed in Israel.
The story in 6 lines · by baba
- Israel Tax Authority proposes taxing departing flights to raise 1.1 billion shekels annually.
- Taxes would range from 1,300 to 100,000 shekels per flight based on weight and distance.
- Passengers could see added costs of 12 to 274 shekels per ticket.
- The proposed tax is expected to be 4-5% of the total flight cost for consumers.
- The tax aims to offset environmental and health costs from air travel.
- Current Israeli tax law largely exempts international flights and jet fuel.
The Israel Tax Authority is considering a new tax on departing flights, aiming to generate approximately 1.1 billion shekels annually based on 2025 prices. The proposal suggests taxing each aircraft departing from Israel based on its weight category and flight distance. The proposed tax amounts would range from about 1,300 shekels for a flight by a plane weighing up to 50 tons on a domestic route, to approximately 100,000 shekels for a flight by a plane weighing over 300 tons on a long-haul route. This method was chosen for its operational simplicity and the certainty it provides airlines regarding their tax obligations, irrespective of the actual number of passengers.
This new tax is expected to translate into an additional cost of around 12 shekels per passenger for domestic flights, approximately 58 shekels for medium-haul flights (primarily to Europe), and about 274 shekels for long-haul flights to destinations like the United States and East Asia. Analysis of current ticket prices indicates that the proposed tax would represent about 4-5% of the consumer's flight cost.
The rationale behind the tax is that flights significantly contribute to global warming, a phenomenon Israel invests resources in mitigating. Additionally, local air pollution and noise pollution from aircraft necessitate further investment in healthcare and noise-protected construction. Unlike the automotive or industrial sectors, Israel's tax system does not currently reflect the external costs imposed on the economy by flights. International flights are exempt from VAT, and jet fuel is exempt from fuel excise taxes.
