Cover IMF Working Papers
Indirect Taxes on International Aviation
Author: Mr. Jon Strand and Mr. Michael Keen
Series:
IMF Working Papers
Volume/Issue:
Volume 2006: Issue 124
Language:
English
Publication Date:
01 May 2006
DOI:
https://doi.org/10.5089/9781451863840.001
ISBN:
9781451863840
ISSN:
1018-5941
Pages:
58
Keywords:
WP; ticket tax; indirect tax; aviation fuel
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper examines the case for internationally coordinated indirect taxes on aviation (as a source of general revenue-not (necessarily) as a source of development finance). The case for such taxes is strong: the tax burden on international aviation is currently limited, yet it contributes significantly to border-crossing environmental damage. A tax on aviation fuel would address the key border-crossing externalities most directly; a ticket tax could raise more revenue; departure taxes face the least legal obstacles. Optimal policy requires deploying both fuel and ticket taxes. A fuel tax of 20 U.S. cents per gallon (10 percent, at today's fuel prices, corresponding to assessed environmental damage), or alternatively ticket taxes of 2.5 percent, would raise about US$10 billion if imposed worldwide, and US$3 billion if applied only in Europe.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund