Israel's Tax Authority proposes new tax on departing flights

Israel's Tax Authority published a position paper recommending a tax on all departing flights, expected to generate 1.1 billion shekels annually. The proposed per-passenger cost ranges from 12 shekels for domestic flights to 274 shekels for long-haul routes to the US or East Asia.

The Israel Tax Authority published today (Sunday) a position paper recommending a new tax on every flight departing from Israel, a move expected to generate about 1.1 billion shekels per year. According to the proposal, prepared by the Planning and Economics Division of the Authority, the tax will be levied based on weight and distance categories. The cost per passenger will range from about 12 shekels for a domestic flight, about 58 shekels for a flight to Europe, and up to about 274 shekels for a long-haul flight to the US or Far East. The Tax Authority estimates this represents an addition of about 4-5% of the average ticket price. The official rationale is environmental and health costs – air pollution, noise, and global warming – which are not currently reflected in the price, since international flights are exempt from VAT and jet fuel is exempt from excise tax. The move aligns with countries like Britain, France, and Germany that already impose a similar tax.