Value Added Tax (VAT) on fuel ?

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ElcoB
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Value Added Tax (VAT) on fuel ?

Post by ElcoB » 04 Jul 2006, 15:02

Proposals to limit the impact of air travel on climate change will be debated by the European Parliament in Strasbourg on Tuesday. 4 Jul.2006..........
......The European Parliament is discussing the proposals, contained in a report, as Europeans queue up at airports to fly off on holiday.

The report recommends that the airline industry's exemption from paying Value Added Tax (VAT) on fuel should be scrapped, and says an additional fuel tax should be brought in. It would apply around the world.
Read more.....

I wonder what will come out of this debate..

AlexanderM
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Post by AlexanderM » 05 Jul 2006, 13:04

According to de standaard all members of the eu have to agree, so hopefully at least one country will see that flying is already expensive enough!

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Post by jan_olieslagers » 05 Jul 2006, 13:53

In all fairness we have to admit that other modes of transportation do pay VAT on their fuel so why shouldn't aviation? But I think the USA are great supporters of the aviation fuel tax exemption, they will surely discourage Europe from changing the current situation.
Besides, if it really is VAT the net effect should be minimal. Airlines will pay more for their fuel, and will pay exactly the same amount of VAT less to their government. So for the airline, I do not think there is any real impact.

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Post by ElcoB » 05 Jul 2006, 14:43

jan_olieslagers wrote:............ So for the airline, I do not think there is any real impact.
Indeed, but it is the passenger who will pay the VAT, so airtravel will be more expensive and this will have an impact.

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Post by ElcoB » 05 Jul 2006, 15:08

MEPs vote for tough action to curb pollution by airlines
Yesterday's proposals, drafted by the Green MEP, Caroline Lucas, would end the anomaly under which aviation fuel is exempt from taxes and duties.
But it proposed going much further than proposed by the European Commission - which plans to include airlines in an existing emissions trading system for industry. This forces firms that exceed caps to buy permits from those that pollute less, or pay a fine.

Yesterday, MEPs backed Ms Lucas's proposal for a specially designed, polluter-pays, scheme for the aviation sector to operate until 2012. Under these plans the airlines could not receive free credits or buy them cheaply from other users.

The vote is not legally binding but sends a strong message. Ms Lucas said: "While aviation has brought a great many benefits to society, its current growth rate is completely unsustainable. Action is urgently needed."
So, it still will take some time before any rule becomes effective.

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Post by teddybAIR » 05 Jul 2006, 15:46

ElcoB wrote:
jan_olieslagers wrote:............ So for the airline, I do not think there is any real impact.
Indeed, but it is the passenger who will pay the VAT, so airtravel will be more expensive and this will have an impact.
So what, what do you prefer: a slightly higher priced airline ticket, or a coastline reaching Brugge in the next 50 years. Really, it's painfull to see how few we do for the environment and how much we object when initiatives to protect the environment are taken. Unfortunately, the only way to significantly change a population's attitude and behaviour is by making a difference in their wallet. That has more impact than any scientific study that is published. Don't get me wrong, I love flying and wouldn't be able to miss it, yet, if it is for the environment, I'm willing to pay a little more for it.

Regards,
Tom

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Post by Advisor » 05 Jul 2006, 16:45

Don't know if INDIA is reading the VAT thing literally.....Major airlines have alread imposed a Rs.500 fuel surcharge from today. :roll:
Aum Sweet Aum.

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Post by iechist » 05 Jul 2006, 17:18

I'd prefer to see tax on the fuel and have all the silly departure taxes dropped.

I'd imagine that countries like Ireland, Malta or Cyprus who are more dependent on air traffic than most might have a problem with this proposal.

Also, this could have a negative environmental impact if airlines decide to start tankering in fuel from lower VAT regimes.

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Post by ElcoB » 05 Jul 2006, 17:54

teddybAIR wrote:So what, what do you prefer: a slightly higher priced airline ticket, or a coastline reaching Brugge in the next 50 ars...................
Fully agree with your opinion.
Maybe we schould add there is not enough investement in developing alternative fuels.

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Post by AlexanderM » 05 Jul 2006, 18:00

Maybe we schould add there is not enough investement in developing alternative fuels.
I totally agree with that! Still, I don't understand why they want taxes on fuel, if they can lower them for Diesel. There are good and less polluting alternatives for diesel and diesel engines.

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Post by Philip1069 » 05 Jul 2006, 18:03

teddybAIR wrote:
ElcoB wrote:
jan_olieslagers wrote:............ So for the airline, I do not think there is any real impact.
Indeed, but it is the passenger who will pay the VAT, so airtravel will be more expensive and this will have an impact.
So what, what do you prefer: a slightly higher priced airline ticket, or a coastline reaching Brugge in the next 50 years. Really, it's painfull to see how few we do for the environment and how much we object when initiatives to protect the environment are taken. Unfortunately, the only way to significantly change a population's attitude and behaviour is by making a difference in their wallet. That has more impact than any scientific study that is published. Don't get me wrong, I love flying and wouldn't be able to miss it, yet, if it is for the environment, I'm willing to pay a little more for it.

Regards,
Tom
Fully agree with that opinion Tom !

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Post by ElcoB » 05 Jul 2006, 18:31

The European Parliament on 4 July has voted by 439 in favour, 74 against and 102 abstentions in favour of measures to address the impact of aviation on the world climate and apply the 'polluter pays principle' to international flights.
For those (students?) interested in more facts and opinions in the matter :

latest news and documents from the European Parlement:

includes: Background, Issues, Positions off party's, IACA and others.

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Post by TexasGuy » 05 Jul 2006, 18:34

I hate taxes!!!!!! ;);)
Theres nothing better than slow cooked fall off the bone BBQ, Texas style

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Post by Philip1069 » 05 Jul 2006, 19:42

TexasGuy wrote:I hate taxes!!!!!! ;);)
Oh Yes, so do I.. as everyone I guess.
But indeed I think we have to stay realistic... everything has its price, and luxery and wellfare also, and I do consider civil aviation within that area

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Post by jan_olieslagers » 05 Jul 2006, 20:39

TexasGuy wrote:I hate taxes!!!!!! ;);)
Well if you don't want road taxes, go live in a country with no roads worth paying tax for. The same goes for fire brigades, hospitals, and what not. Don't forget the availability of clean water, today it's self-evident and almost free, that can't last much longer. And if the world goes on as it is going, we'll soon have to pay for clean air to breathe.

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Post by jan_olieslagers » 05 Jul 2006, 23:07

On a sidenote: the fuel for jet engines, commonly known as AvTur or JetA1 is sold free of VAT in Belgium and in most (all?) EEC countries. OTOH AvGas, the heavily leaded benzine mostly used in general aviation does carry VAT and is thus a lot more expensive. This is one of the arguments in favour of diesel engines for G/A like the Thielert engines used (amongst others) in the DA42 Twin Star, that can run on JetA1: they are quite expensive engines but the lower fuel price makes up for this. For the time being, that is.

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Post by Stepha380 » 06 Jul 2006, 01:54

Air fares 'to double' as Europe votes for green tax a very good article
http://www.timesonline.co.uk/article/0, ... _1,00.html
Why only on intra european flights ?? Not brave enough and discriminatory for sure, always the Airbus VS Boeing launch aid conflict.
In a near future it will be cheaper to connect through Norway or Marocco to fly from Paris to London :mexwave:
By the way, more and more corporate people will fly in coach. Lots of companies already booking coach tickets when travelling by airplane and upper class by train. :teach:
A very good opportunity for the railroad companies that operates High Speed Train like ICE or TGV (Eurostar, Thalys...).

SN30952
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DON"T vote for MEP's who impose taxes on you!

Post by SN30952 » 06 Jul 2006, 08:38

IMHO, it is NOT a VAT.
It is a GREEN tax. There is no vaulue added... its a penalty and a PONC.
But can we forgive the MEP's as they know not what they do?
DON"T vote for MEP's who impose penalty taxes on you!

:offtopic: I know.... think of it as Bryan Adams wrote: Please Forgive, Please forgive me I know not what I do.
I do not like penalties, cfr Worldcup. What if match 64 ends with a draw?
btw some matches ended with more than a drawl.... :insult:

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Post by jan_olieslagers » 06 Jul 2006, 08:50

Fons have you carefully read the original message?
the airline industry's exemption from paying Value Added Tax (VAT) on fuel should be scrapped, and says an additional fuel tax should be brought in
I'll agree with you that extra taxes are unwanted. OTOH the VAT exemption seems unfair to me, I can accept they wish to do away with it.

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Post by SN30952 » 06 Jul 2006, 09:14

jan_olieslagers wrote:Fons have you carefully read the original message?
the airline industry's exemption from paying Value Added Tax (VAT) on fuel should be scrapped, and says an additional fuel tax should be brought in
I'll agree with you that extra taxes are unwanted. OTOH the VAT exemption seems unfair to me, I can accept they wish to do away with it.
I mentioned that earlier, and said also to keep an eye on the MEP fares, to see if they not exempt themself of their penalty.
That VAT would weigh on pax and cargo rates. What about airmail? But how? How would Postes Francaises solve the problem?
I cannot imagine an honnest calcullus to charge everybody proportionally to 'the added value' of his airtrip, airshipment. Because fuel consumption is linked to many factors.

Would you pay the same penalty for a flight on a prop as on a modern jet? What about if you sat on a 747-combi, that uses more fuel because of its heavier payload of cargo?
This thing doesnot work, there will be always someone cheated, presumably me, I think. Therefor it is NO!

Remember how difficult it was to calculate VAT on airpackages? You know what the VAT is on a holliday package? Ask your travel agent...

And who would collect it, and to who would benefit?

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