The French Government’s proposed tax increases on air transport would be “disastrous” for France’s economy, the International Air Transport Association (IATA) has warned.
It is widely expected that the French government will significantly increase taxes on air passengers as part of a general package of new taxes aimed at closing France’s budget deficit.
But, the evidence is that countries with higher aviation taxes have recovered slowest from the pandemic shutdown. Increases in French aviation taxes will further damage its recovery and the ability of aviation to drive wider economic benefits and tax revenues, IATA warned.
IATA Director General Willie Walsh said: “If these tax proposals are implemented it will be a disaster for France. You cannot tax yourself to prosperity. Aviation is a driver of employment and prosperity, as well as a proven accelerator of growth in other parts of the economy.
“It is essential that the French government instigate an impact assessment of these taxes. The proposal smacks of panic and a lack of joined up thinking. Is the government aware that France has fewer passengers and serves fewer destinations than it did before the pandemic? Isn’t the Minister for Tourism concerned that the target of reaching 100 million tourists will be undermined by these taxes?
“How does the Environment Minister think that extracting EUR1 billion from French aviation will help with the massively expensive transition to sustainable aviation fuels? What has the Prime Minister to say about these taxes falling hardest on French businesses and harming French jobs? The Swedes have responded to their sluggish growth by abolishing their aviation tax. France should learn from their example. The only answer for France’s deficit is to grow its economy and widen the tax base, not tax the productive parts of the economy to a standstill.”
