Israel Tax Authority proposes tax on outbound flights to fund state budget

The Israel Tax Authority recommends a new tax on departing flights, calculated by aircraft weight and distance, expected to generate 1.1 billion shekels annually. The tax would be passed to passengers, increasing ticket prices by 12 shekels for domestic flights, 58 for Europe, and 274 for long-haul. It has not yet been legislated.

A senior official at the Israel Tax Authority, Ofer Raz-Dror, Deputy Director of the Economic Division, said in an interview with Kan News that the recommendation to impose a tax on outgoing flights stems primarily from the need to fund the state budget, alongside environmental considerations. According to him, tax revenues in 2022 stood at 430 billion shekels, and by 2027 the demand is expected to reach 600 billion shekels. The proposed tax will be calculated based on aircraft weight and flight distance, using an existing operational structure. The highest tax will be 100,000 shekels per flight, and it is expected to be passed on to consumers: a flight to Eilat will become more expensive by about 12 shekels, a short flight to Europe by 58 shekels, and a flight to the East by 274 shekels. The Tax Authority estimates that the tax will generate about 1.1 billion shekels per year.