A Finnair aircraft landed at Helsinki Airport on 1 August 2023. The Finnish majority state-owned airline benefited from the tax exemptions granted to aviation to the total tune of 474 million euros in 2022, according to a report published by Transport & Environment. (Vesa Moilanen – Lehtikuva)
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FINNAIR benefited almost 475 million euros from tax exemptions granted to air travel in 2022, reveals a report by Transport & Environment, a Brussels-based umbrella organisation for non-profits promoting sustainable transport in Europe.
T&E in July published a study that compares the taxes airlines paid to the taxes they would have had to pay if air travel did not enjoy the tax exemptions it currently does.
The European Union’s energy taxation directive exempts kerosene supplied for air travel from the fuel tax unless it is used for private leisure flights. Airlines are also benefiting from allowances that cover up to half of their emissions under the emission trading system, meaning they only pay for a fraction of their carbon-dioxide emissions.
Furthermore, no value-added tax is levied on tickets on international flights. In Finland, domestic flights are subjected to the same, lowered 10-per-cent value-added tax as other transport services.
Finnair, the report reveals, benefited from fuel and emission-related exemptions to the total tune of 231 million euros and from the preferential tax treatment of tickets to the tune of 243 million euros, adding up to 474 million euros. The Finnish majority state-owned flag carrier came in 19th out of the 25 airlines examined in the report.
The biggest aviation tax gap was caused by Air France, which benefited from exemptions worth 2.38 billion euros. The French airline was followed by Lufthansa, with 2.31 billion euros worth of benefits, and Ryanair, with 2.12 billion euros worth of benefits.
Overall EU governments lost out on 34.2 billion euros in revenue to the preferential tax treatment of air travel in 2022, according to T&E.
How do governments justify generating more revenue from fuel taxes from motorists than from the likes of Air France and Lufthansa, asked Jo Dardenne, aviation director at T&E.
“Europe is bleeding money by not taxing the aviation sector. Airlines are edging closer to record profits this year, whilst spewing dirty fuels in our skies. But governments are unwilling to touch their precious national carriers,” she said.
“Taxation should not be perceived as a punishment but as a way to fairly charge those who benefit most from aviation’s under-regulation. Those better off in society have been paying far too little for their flying habits.”
Taxation, she also argued, will not disable the sector to make investments but will benefit both citizens and the sector in the long term as governments step in to finance the transition to clean energy, including for aviation.
Aleksi Teivainen – HT
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Source: www.helsinkitimes.fi
