Tax Authority Recommends Tax on Flights Departing Israel

In depth

The Tax Authority published a position paper recommending a tax on every aircraft departing Israel, based on its weight and flight distance. The proposal is meant to reflect the environmental costs of flights, and the recommendation has not yet been approved.

According to the proposal, the tax would be imposed on the airlines but is expected to be passed on to passengers: about NIS 12 on a domestic flight, about NIS 58 on a flight to Europe and about NIS 274 on a flight to the US and East Asia, which are about 4%-5% of the ticket price. For an aircraft of up to 50 tons the tax would amount to about NIS 1,300, and on a long flight in an aircraft over 300 tons it would reach about NIS 100,000.

The Tax Authority estimates that the tax would bring about NIS 1.1 billion per year into the state treasury, and according to it, this is the simplest alternative to implement. Sweden cancelled a similar tax, and in Germany and the Netherlands the rates were rolled back or reduced.