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Indirect Taxeson International Aviation

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  • Jon Strand
  • Michael Keen

Abstract

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.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 06/124.

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Length: 58
Date of creation: 01 May 2006
Date of revision:
Handle: RePEc:imf:imfwpa:06/124

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Keywords: Indirect taxation; Energy taxes; Transport; Environment; aviation fuel; fuel tax; airlines; airline; air transport; air travel; fuel efficiency; air traffic; civil aviation; icao; air pollution; aviation gasoline; international flights; domestic flights; airline industry; aviation fuels; international civil aviation organization; jet fuel; fuel consumption; airspace; environmental harm; aircraft emissions; aviation market; air routes; air service; nitrogen oxides; air services; fuel price; international passengers; greenhouse gases; civil aviation department; diesel fuel; airport authority; transport modes; increasing fuel efficiency; jet fuels; international flight; civil aviation activity; greenhouse effect; international airline; air route; airfares; transport statistics; carbon dioxide; national airlines; aviation sector; airline sector; aviation industry; air navigation; air transportation; global airlines; airport taxes; hydrocarbon emissions; airfare; gasoline tax; soot emissions; jet fuel tax; airline deregulation; airbus; air transport statistics; fuel taxation;

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References

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Citations

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Cited by:
  1. Cohen, Maurie J., 2010. "Destination unknown: Pursuing sustainable mobility in the face of rival societal aspirations," Research Policy, Elsevier, vol. 39(4), pages 459-470, May.
  2. Benjamin Jones & Michael Keen & Jon Strand, 2013. "Fiscal implications of climate change," International Tax and Public Finance, Springer, vol. 20(1), pages 29-70, February.
  3. Jon Strand, 2008. "Importer and Producer Petroleum Taxation," IMF Working Papers 08/35, International Monetary Fund.
  4. Don Fullerton & Andrew Leicester & Stephen Smith, 2008. "Environmental Taxes," NBER Working Papers 14197, National Bureau of Economic Research, Inc.
  5. Jon Strand, 2007. "Energy Efficiency and Renewable Energy Supply for the G-7 Countries, with Emphasison Germany," IMF Working Papers 07/299, International Monetary Fund.
  6. Ben Cherniavsky & Benjamin Dachis, 2007. "Excess Baggage: Measuring Air Transportation’s Fiscal Burden," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 242, February.
  7. Michael Keen & Ian Parry & Jon Strand, 2013. "Planes, ships and taxes: charging for international aviation and maritime emissions," Economic Policy, CEPR & CES & MSH, vol. 28(76), pages 701-749, October.

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