| UK here. > Aviation is currently undertaxed, according to economists from the IMF and World Bank, compared to other forms of transport. Airlines pay no fuel duty and VAT is zero rated meaning that no tax is charged on sales and tax charged on inputs is refunded. > ... > CE Delft calculated in 2013 that the shortfall as a result of these two anomalies amounted to around €27 billion annually in Europe. > ... > At a global level, the World Bank and IMF favour a relatively low tax universally applied per tonne of CO2, which could then raise money for climate change mitigation. > In the UK, the Liberal Democrat and Conservative coalition considered in 2010 replacing APD with a per plane tax to include freight aircraft and provide an additional incentive to airlines to fill empty seats. However, this was dropped following concerns, the Government claimed, about concerns that it could be challenged legally as representing a proxy fuel tax (contrary to bilateral air service provisions with other countries). > Another alternative would be a form of taxation that discouraged frequent fliers. https://www.aef.org.uk/issues/economics/taxation/ |