The old saying
goes that death and taxes are the two constants in life.
Now, the governing
body of most major airlines is trying to amend one of those.
The International
Air Transport Association (IATA) is urging the United Nations not to change the
aviation tax
structure currently in place. It wants to keep the same plan where airlines
are taxed by their home areas and not by the destinations where they fly.
IATA says it would
be too complicated to change and could lead to some situations where airlines
would abandon those destinations that fail to pay taxes.
"The
proposals would be incredibly complex, would not necessarily lead to taxes in
the developing countries...because the complexity associated with the tax
environment may well lead to airlines stopping services to those areas,"
IATA Director General Willie Walsh said. "For governments, it would just
mean collecting less from their national airlines and spending huge effort and
money collecting taxes from foreign operators. Only the battalions of
accountants needed to manage the reporting mess will be happy if the change is
made."
A
United Nations committee has been looking into the issue.
"The
move is provoked by frustration with how shipping, not aviation, uses flags of
convenience to find friendly tax regimes. That is no reason to change the
efficient way aviation pays its corporate taxes," Walsh said. "Relief
from the parade of onerous regulation and ever-increasing tax proposals."
The
discussion comes at a good time since shipping and passenger
demand is up.
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