18-Aug-2010 10:18 AM

Japan considering halving aircraft fuel tax; reducing airport landing fees

Japan's MLITT reportedly plans to halve the aircraft fuel tax from FY2011 (The Yomiuri Shimbun, 17-Aug-2010). The tax imposed on aircraft fuel used on domestic routes currently stands at JPY26,000/kilolitre, which would be reduced to JPY13,000 according to the plans, which would mark the first reduction since the tax's introduction in 1972. Having the tax would lessen the financial burden on domestic airlines, with both Japan Airlines and All Nippon Airways stating it would consider lower airfares in the fuel tax is reduced. Transport Minister, Seiji Maehara, has reportedly been calling for a review of the airport improvement account, with the fuel tax consitituing a revenue source for the airport account. The Ministry is also considering reducing airport landing fees. Based on FY2010 account budget estimates, the Ministry estimate fuel tax revenue would account for JPY71. billion of the project total revenue, or 16% of total revenues.

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