The Dutch government has launched public consultations on its plan to reintroduce an aviation tax in the country from 2021 onwards, De Telegraaf newspaper has reported.

The proposal put forward by the government includes a EUR3.8 euro (USD4.4) levy per passenger on European routes and EUR22 euro for those on intercontinental flights. The plan anticpates that the tax will generate an additional EUR200 million in annual revenue for the Dutch government.

The government has also floated an idea for a European Union-wide aviation tax.

A group of airline organisations, including IATA, Airlines for Europe (A4E) and the European Regional Airlines` Association (ERA), expressed their opposition to the new tax in a letter to the Dutch government in December 2017.

KLM Royal Dutch Airlines (KL, Amsterdam Schiphol) and the Royal Schiphol Group, which manages the airports of Amsterdam Schiphol, Eindhoven, Rotterdam, and Lelystad, said that the new tax would not help the environment but instead harm air traffic and the Dutch economy on the whole.

According to the ch-aviation capacity module, KLM and its low-cost subsidiary Transavia Airlines (HV, Amsterdam Schiphol) would be the hardest-hit airlines as they have a combined market share of 54.7% by capacity in the Netherlands. Other airlines with over 2% market share include easyJet, Ryanair, Delta Air Lines, and Vueling Airlines.

The Netherlands first tried to introduce an aviation tax in 2008, but scrapped it just a year later. According to an Airport Technology report, while the tax netted EUR380 million for the government, it also led to an 8% drop in traffic at Amsterdam Schiphol as airlines chose to fly from Brussels National or German airports instead.

A PwC study conducted for A4E has shown that abandoning aviation taxes in Europe would have a nearly zero net income effect for the government. Since such a move will help airlines and other industries to grow, revenues from income, value-added and other taxes would nearly fully offset the lost revenue from the aviation tax itself.

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