IATA Warns of Job Losses After Italy Surprises with New Aviation Tax

The International Air Transport Association (IATA) has condemned a sudden increase in the Italian Council Tax levied on air passengers, warning that it “will damage Italian economic competitiveness”, and result in 2,300 lost jobs a year.

Italian authorities, IATA states, announced a 33-38% increase in its Council Tax, effective immediately in January, “without any advance warning or consultation.”

The airline association says the tax will have a cost impact of an extra EUR 2.50 for every passenger on existing taxes. Passengers will, thus, pay EUR 10 in tax each time they fly from airports near Rome, and EUR 9.00 for flights from other Italian airports. “None of the revenue raised from the tax is re-invested in aviation, instead it is diverted for general purposes,” IATA states.

“This sudden jump in the cost of flying from Italy can only cause harm to the Italian people and its economy. The increase in the Council Tax will reduce passenger numbers by over 755,000 and GDP by EUR 146 million per year. 2,300 jobs a year will be lost, meaning that by the end of the decade over 9,000 jobs will have been needlessly squandered,” says said Rafael Schvartzman, IATA’s Regional Vice President for Europe.

“Rather than increase this inefficient and ineffective tax, the Italian government should urgently enact policies to encourage the growth of air transport links, which are proven to enhance employment, innovation and cultural activities. The Government should start with a full-scale review of the economic basis of the tax, with a view to its complete removal. Airlines and passengers should not become an easy source of income for any Government.”

IATA is calling on the Italian Government to reform a number of other taxation and regulation issues which will enhance competitiveness.

Other European countries, like the Netherlands and Ireland, IATA points out, have shown that removing taxation “boosts traffic and benefits the economy of the country. ”

 

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