Israel Tax Authority Proposes Departure Tax on Flights

Israel's Tax Authority has published a position paper recommending the imposition of an environmental tax on all aircraft departing from Israel. The proposed tax would vary based on the aircraft's weight and flight distance, with the aim of generating approximately 1.1 billion shekels annually for the state treasury. The tax is expected to range from 1,300 shekels for small domestic flights to around 100,000 shekels for large aircraft on long-haul routes. This measure is projected to increase ticket prices for passengers, with estimates suggesting an additional 12 shekels for domestic trips, 58 shekels for European flights, and 274 shekels for distant destinations like America and East Asia, representing a 4% to 5% fare increase. The Tax Authority justified the recommendation by citing the significant environmental impact of the aviation sector, including emissions, global warming, pollution, and noise. They also noted the absence of environmental taxes on aviation fuel or value-added tax on international flights in Israel, unlike several European countries such as Britain, France, and Germany. In response, airline companies, including Air Haifa, have expressed reservations, warning that the direct consequence would be new financial burdens and higher ticket prices for citizens.