Taxing aviation won't pay, experts warn government

New Delhi: India has come under criticism for imposing fresh taxes on international air travellers in the current budget, with global aviation experts terming it as an easy "financial grab" that would affect the economy in the long run.
"While taxes provide a tangible short-term revenue boost to the government coffers, increased taxes in the long term can be outweighed by the cost to the underlying economy", said an aviation finance specialist, Charles Tyler .
"Germany, India and Austria are not claiming their taxes are environmental. They are simply a financial grab on behalf of the respective government", he said in the latest issue of IATA journal 'Airlines International'.
Tyler pointed out that India "has been increasing its taxes on air tickets, which is negatively affecting the Indian civil aviation industry.
"Despite campaigns that stated that the tax contravenes International Civil Aviation Organisation ( ICAO )) policies, the Indian finance ministry extended airline taxes to all classes of domestic and international airline tickets", he said, adding that earlier such a tax was levied only on premium class international tickets.
27/06/11 PTI/Economic Times

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Categories: Air India Jun 2011