Israel Considers New Flight Tax to Fund Environmental and Health Costs

By דודי גרליץ

Translated & summarized from JDN by baba

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Israel's Tax Authority has proposed a new tax on departing flights to help fund environmental and health costs associated with aviation. The tax, which could raise 1.1 billion shekels annually, would range from 1,300 to 100,000 shekels per flight depending on aircraft size and distance. Passengers could see ticket prices rise by 4-5%, with additional costs ranging from 12 to 274 shekels per ticket. The proposal aims to align Israel with international practices, as many European nations already have similar levies.

The story in 6 lines · by baba

Israel's Tax Authority proposes a new tax on departing flights, potentially raising 1.1 billion shekels annually.
The tax aims to fund environmental and health costs linked to the aviation industry.
Flight taxes would vary from 1,300 to 100,000 shekels based on aircraft weight and destination.
Passengers may face a 4-5% increase in ticket prices, costing 12 to 274 shekels extra per person.
The proposal follows similar taxes implemented in countries like the UK, France, and Germany.
Currently, Israeli aviation is largely untaxed, with exemptions for international flights and jet fuel.

Israel Considers New Flight Tax to Fund Environmental and Health Costs — Editorial illustration generated by baba News, not a photograph of the event.

Israel's Tax Authority is proposing a new tax on all departing flights from the country as part of the upcoming state budget discussions. The proposed tax, detailed in a position paper released today by the authority's Planning and Economics Division, would be calculated based on aircraft weight and destination distance. Rates would range from approximately 1,300 shekels for domestic flights by light aircraft (under 50 tons) to up to 100,000 shekels for long-haul flights by heavy aircraft (over 300 tons).

This new levy is expected to be passed on to passengers, potentially increasing ticket prices by 4% to 5%. The additional cost per passenger is estimated at around 12 shekels for domestic flights, 58 shekels for medium-haul flights (primarily to Europe), and 274 shekels for long-haul flights to destinations like the United States and the Far East. The Tax Authority estimates this tax could generate about 1.1 billion shekels annually for the state, based on 2025 prices.

The rationale behind the proposal is to address the environmental and health impacts of the aviation industry, including contributions to global warming, local air pollution, and noise disturbances near airports. These issues necessitate significant investment in infrastructure and healthcare, according to the authority.

Currently, the aviation sector in Israel is largely untaxed, with international flights subject to zero VAT and jet fuel exempt from excise tax. The Tax Authority pointed out that many Western countries, including the UK, France, and Germany, already impose similar taxes. They also stated that the chosen alternative offers airlines operational certainty and simplicity.