Israel Considers New Flight Tax to Raise NIS 1.1 Billion Annually
Translated & summarized from i24NEWS by baba
Israel's Tax Authority is considering a new tax on outbound flights, which could raise approximately NIS 1.1 billion annually. The tax, based on aircraft weight and flight distance, is expected to increase ticket prices by 4-5%, adding costs for passengers. The proposal aims to address the environmental impact of aviation and is similar to taxes in other Western countries. The measure requires legislative approval before it can take effect.
The story in 6 lines · by baba
- Israel's Tax Authority proposes a new flight tax expected to raise NIS 1.1 billion annually.
- The tax could increase airfare prices by an estimated 4% to 5% for passengers.
- The proposed tax is based on aircraft weight and flight distance, not directly on passengers.
- Children under two years old may be exempt from the new flight tax.
- Several Western countries already have similar taxes on outbound flights.
- The proposal is currently a position paper and requires legislative approval to be enacted.
Israel's Tax Authority is proposing a new tax on outbound flights, which could increase ticket prices by approximately 4% to 5%. While the tax would formally be levied on the aircraft based on its weight and flight distance, airlines are expected to pass the cost onto passengers. The proposal aims to address the environmental impact of air travel, as international flights are currently largely untaxed in Israel, with zero VAT on tickets and tax exemptions on jet fuel.
The proposed tax structure would categorize aircraft into four weight groups and flights into three distance categories. The lowest tax rate would be NIS 1,291 for a flight by a light aircraft on a domestic route, while the highest could reach NIS 100,087 for a heavy aircraft on a long-haul flight. For passengers, the estimated additional cost per person in economy class would be around NIS 12 for domestic flights, NIS 58 for flights to Europe, and NIS 274 for flights to the US or East Asia. A family of four flying to Europe could see an additional cost of approximately NIS 232, and to the US, around NIS 1,096. Children under two years old may be exempt, similar to existing passenger fees.
This initiative is projected to generate about NIS 1.1 billion annually for the state treasury, with potential increases of around 15% in 2028-2029 due to expected growth in the aviation sector. The Tax Authority considered other options, including a fixed passenger fee or a tax on jet fuel, but favors taxing the aircraft itself for operational simplicity and predictability for airlines. Several Western countries, such as the UK, France, Germany, and others, already impose taxes on flights or departing passengers, though their mechanisms vary.
The proposal is currently a professional position paper and has not yet been approved by legislation. If adopted as part of the state budget and passed into law, the tax could be implemented and affect ticket prices.
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