[BITList] India on IATA’s ‘Wall of Shame’

[John Feltham]

India on IATA’s ‘Wall of Shame’

Mamuni Das


Business Line Mr Giovanni Bisignani, Director-General and CEO, International Air Transport Association. (file photo)

For imposing high service tax on air tickets

Singapore, June 6: 

The Indian Government has been put on the ‘Wall of Shame' by the International Air Transport Association (IATA), a lobby body of international air carriers, for imposing high service tax on air tickets.

However, India can draw solace from the fact that it is in the ‘august company' of Governments of the United Kingdom, Germany and Austria.

“Taxing aviation does not pay,” said IATA's Director-General and CEO, Mr Giovannio Bisignani, and added, “tax the bankers. They created the mess. Their billions in bonuses should help to clean it up.”

He said service tax has had an impact of $450 million on aviation. “The UK, Germany, Austria and India need a textbook on aviation's economic role,” he added.

“Also on the Wall is the hit parade of government tax bandits...The UK for its $4.5 billion Air Passenger Duty, the largest aviation tax in the world; Germany for its $1.3 billion departure tax; Austria for copying Germany with a $119 million tax; and India for its $450 million Service Tax, in complete contravention of ICAO rules,” he said at the IATA's 67th Annual General Meeting.

Mr Bisignani, who is considered a smooth negotiator, and believes in “embarrassing Governments with facts and figures” and the art of “shouting politely,” started the concept of “Wall of Shame” and “Basta Awards” at IATA a few years ago. Basta is Italian for ‘enough.'

Many Governments and airports that have hurt profitability of airlines through their policies have made it to this list.

Two Indian airports — Delhi and Mumbai — had made it to this list in June 2009 following a steep hike in charges for airlines.

“The Dutch repealed a $412 million departure tax because it cost the economy $1.6 billion. And the Irish plan to cancel their $165 million Travel Tax because it cost $594 million and 3,000 jobs. The lesson for Governments is simple: don't kill the goose that lays golden eggs,” said Mr Bisignani.

URL: http://is.gd/ASOBr6 (From Business Line e-magazine of The Hindu)



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