EU could tax aircraft fuel unilaterally

Transport ministers question Ecu8 billion tax exemption for airlines

Dutch transport minister Annemarie Jorritsma has suggested that the European Union could introduce an aircraft fuel tax unilaterally. Mrs Jorritsma presided over a meeting of EU transport ministers yesterday, at which the issue was discussed. After the meeting, she said she was "not convinced that aviation charges can only be implemented on a global level; it may well be feasible to introduce charges in a European context."

At present, aviation fuel, or kerosene, is exempt from taxation under the international Chicago Convention. In the EU a 1992 directive on the harmonisation of excise duties on mineral oils confirms the exemption.

EU environment ministers said in December 1994 that the exemption could not be justified on environmental grounds. Austria raised the matter again during last week's Environment Council (ENDS Daily 3 March). Its national delegation asked the European Commission to "further discuss the possibilities" of taxing aircraft fuel.

The Dutch Presidency has begun working on the issue. A draft resolution discussed yesterday by transport ministers asks the European Commission to report on the possibilities for and effects of introducing such a tax before the end of 1997.

Yesterday's meeting of transport ministers revealed a slim majority of EU members, mostly northern countries, in favour of introducing an EU tax in the context of international action. The rest, including France, are, in principle, opposed to any such tax. Austria, the Netherlands and the Scandinavian countries are most progressive on the issue. At yesterday's meeting, their delegations said they would support an EU tax even if agreement could not be reached internationally.

In the meantime, the Association of European Airlines has voiced opposition to any sort of aircraft fuel tax. Spokesman David Henderson told ENDS Daily that the industry didn't like being used as "a means to raise money under the environmental banner when there are far worse polluters around."

But the EU environmental group, Transport and Environment, welcomed the Dutch initiative. The group said that the tax exemption costs EU governments Ecu8 billion annually in lost tax revenue.

Follow Up:
Association of European Airlines, tel: + 32 2 627 0600; Transport and Environment, tel: +32 2 537 6639.

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