Proposed EU Airline Ticket Taxes: Will a “Voluntary” Tax Work?

May 17, 2005

Finance ministers in the EU recently agreed on a new “voluntary” tax scheme to help generate aid for developing nations. The new initiative would levy a 10 euro tax on flights in the EU and a 30 euro tax on international flights. There is a great deal of confusion, however, over whether the tax will truly be voluntary for taxpayers.

Some countries, such as France and Germany, will levy the tax on a mandatory basis. Other countries will ask passengers whether they want to contribute to the aid fund. The EU won’t have the final details officially sorted out until sometime in June.

Generally speaking, a revenue measure is not properly called a “tax” unless one can go to jail if they refuse to pay. It will be interesting to monitor how this airline ticket tax is developed in the EU, how many countries make it mandatory, and whether the tax is able to meet its revenue target without being levied on a compulsory basis.

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