The Dutch government wants to add an air passenger tax to airline tickets starting in 2021. Will the Netherlands embrace a controversial scheme like the UK Air Passenger Duty?
The proposed plan will start modestly: €3.80 on flights within the EU and €22 on intercontinental flights.
The UK Air Passenger Duty also started modestly: £5 in Europe and £20 outside of Europe for economy class, and £10 within Europe and £40 for other destinations for premium economy class or higher. Today, flights over 2,000 miles are £75 in economy class and £150 in premium cabins.
The Dutch tax is intended to “make the aviation sector more sustainable” by using the raised money to invest in green-related initiatives.
Tried and Failed
This is not the first time the Netherlands has tried such a tax. In 2008, an €11.25 tax was levied on EU flights and €45 for all flights beyond. A year later, the tax was repealed. Unsurprisingly, with margins tight and airlines passing on the tax to consumers, many chose to fly out of nearby Germany or Belgium instead.
But think back to 2008…the year the Great Recession began. The Netherlands and the world are in a very different financial position a decade later.
As you might imagine, airlines are against such a tax. EasyJet has already taken a vocal and public stance against the proposed new tax.
Johan Lundgren, EasyJet’s CEO, said:
It’s painted as an environmental tax, but with no benefit to the environment. We are against it. It is not the way forward…We are engaging with the [Dutch] government on this.
I’m suspicious of taxes that begin modestly only to grow far faster than inflation. I don’t pretend to be a tax expert, but consumers will vote with their feet if tax burdens become too high. If the new aviation tax is levied, I hope the government will be able to demonstrate to the many visitors merely passing through Amsterdam each day what these added fees will be used for.