Taxes imposed on airlines and their customers have a detrimental effect to the benefits that the airlines bring to the consumer and consequently to the economy as a whole. Nonetheless, we see that several states do not yet see the adverse effect that the increase in taxes has on their economy. Taxes are imposed on the sale and use of air transportation, fuel, property, equipment, sometimes income, development aid, environment and climate change, and tourism expansion.
Although most Arab governments look at aviation as a driver to the economy, we still see some hikes in government taxes.
Work with ACAO and IATA
AACO has always been keen on promoting an environment with reduced taxes on airlines, especially when it comes to taxes introduced by governments to fund projects not related to the aviation industry.
AACO cooperates with the Arab Civil Aviation Organization (ACAO) and the International Air Transport Association (IATA) when it comes to advocating for a lower taxes environment. The three associations have published a joint declaration related to taxes as well as airport charges that has instituted their joint work in this area. Please click here to view the joint declaration.
Tunis Convention
Based on a resolution by the Council of Arab Transport Ministers, AACO worked with the Arab Civil Aviation Organization (ACAO) and Arab financial authorities under the umbrella of the League of Arab States to revise the existing Tunis Convention 1979 on the ‘Reciprocal Exemption from Taxes and Charges on Activities and Equipment of Arab Air Transport Institutions’.
Following seven meetings of Arab Financial Authorities, with the participation of AACO and ACAO, that revised the Tunis Convention of 1979, the Council of the League of Arab States approved the new version of the Convention, following adoption by the Council of Social and Economic Affairs of the League and the Council of Arab Transport Ministers.
Following observations from a number of Arab states on the revised convention, the relevant committee, referred to above, continues to amend the convention which has not moved forward to be open for ratification by Arab states.
Last updated on February 2022