Danish airline tax criticised over channeling of revenue into welfare
Opposition politicians have criticised an announced tax on airline tickets because the government said it will not spend all revenues from the tax on the aviation sector.
The government on Thursday announced its plan to phase in a tax on airline tickets over the coming years. The tax, which will be introduced gradually, will cost an average of around 100 kroner per flight and 390 kroner for the longest-distance flights when fully imposed in 2030.
While some of the revenue from the tax will go towards developing green domestic flights and supporting regional airports, it will also be used to pay for additional welfare for eligible senior citizens.
This aspect of the plan has received criticism from opposition parties.
“If we are to have an airline ticket tax, and we should, the money must go back to the industry. All the revenue must go back into the industry,” climate spokesperson Samira Nawa of the Social Liberal party told Ritzau.
The Conservative party expressed similar reservations about the proposal, with climate spokesperson Mona Juul saying “this cross-financing that is the order of the day makes no sense”.
“With a passenger tax, the revenue must go back into green transition in aviation,” she said.
“I’m sure that the government with the budget surplus it has, is able to finance other measures in other ways,” Juul said.
READ ALSO: What will Denmark’s new flight taxes cost and how will they affect air travel?
The libertarian party Liberal Alliance, which generally opposes higher taxation, said the revenue from the planned airline ticket tax had been wrongly prioritised.
“It’s being sold as if it’s being done for green transition. Now money is being taken out of the industry,” transport spokesperson Jens Meilvang told broadcaster TV2.
“All the money should be given back to the sector so they can switch [to green energy] because it’s expensive,” he said.
The revenue to the state from the tax is predicted to be 900 million kroner in 2025, of which 610 million will be spent on an increase to the so-called ældrecheck or “elderly cheque”, an additional pension payment to recipients of the folkepension state pension who have low personal fortunes. Some 290 million will go to the aviation sector.
In 2030, the majority of the revenue will go to green aviation, with 620 million kroner to be spent here while 580 million is diverted to the elderly cheque.
Planned spending of the revenues will be in several areas, including the development of a “green” domestic flight in Denmark, which will be put out for tender in 2025.
The green flight will “give airports and airlines the opportunity to test green technologies and at the same time create greater demand for both green travel and green technology,” the government said in a statement. Around 800 million kroner will be invested in this by the government.
Further to this, the government is aiming for fully green domestic flights by 2030, with 1.5 billion kroner set aside to support this for the period 2027-33. This is a long-standing ambition of the Danish government.
The travel tax is expected to give the Danish state a revenue of 1.2 billion kroner in 2030.
This will also finance the additional welfare for elderly people in Denmark, along with state support for regional airports.
Tax minister Jeppe Bruus said on Thursday that the planned spending would benefit ”two good causes”.
Nawa said her party does not think more should be spent on the elderly welfare “right now”.
“On the contrary, our gaze is focused ahead on green transition, climate, children, young people and education,” she said.
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The government on Thursday announced its plan to phase in a tax on airline tickets over the coming years. The tax, which will be introduced gradually, will cost an average of around 100 kroner per flight and 390 kroner for the longest-distance flights when fully imposed in 2030.
While some of the revenue from the tax will go towards developing green domestic flights and supporting regional airports, it will also be used to pay for additional welfare for eligible senior citizens.
This aspect of the plan has received criticism from opposition parties.
“If we are to have an airline ticket tax, and we should, the money must go back to the industry. All the revenue must go back into the industry,” climate spokesperson Samira Nawa of the Social Liberal party told Ritzau.
The Conservative party expressed similar reservations about the proposal, with climate spokesperson Mona Juul saying “this cross-financing that is the order of the day makes no sense”.
“With a passenger tax, the revenue must go back into green transition in aviation,” she said.
“I’m sure that the government with the budget surplus it has, is able to finance other measures in other ways,” Juul said.
READ ALSO: What will Denmark’s new flight taxes cost and how will they affect air travel?
The libertarian party Liberal Alliance, which generally opposes higher taxation, said the revenue from the planned airline ticket tax had been wrongly prioritised.
“It’s being sold as if it’s being done for green transition. Now money is being taken out of the industry,” transport spokesperson Jens Meilvang told broadcaster TV2.
“All the money should be given back to the sector so they can switch [to green energy] because it’s expensive,” he said.
The revenue to the state from the tax is predicted to be 900 million kroner in 2025, of which 610 million will be spent on an increase to the so-called ældrecheck or “elderly cheque”, an additional pension payment to recipients of the folkepension state pension who have low personal fortunes. Some 290 million will go to the aviation sector.
In 2030, the majority of the revenue will go to green aviation, with 620 million kroner to be spent here while 580 million is diverted to the elderly cheque.
Planned spending of the revenues will be in several areas, including the development of a “green” domestic flight in Denmark, which will be put out for tender in 2025.
The green flight will “give airports and airlines the opportunity to test green technologies and at the same time create greater demand for both green travel and green technology,” the government said in a statement. Around 800 million kroner will be invested in this by the government.
Further to this, the government is aiming for fully green domestic flights by 2030, with 1.5 billion kroner set aside to support this for the period 2027-33. This is a long-standing ambition of the Danish government.
The travel tax is expected to give the Danish state a revenue of 1.2 billion kroner in 2030.
This will also finance the additional welfare for elderly people in Denmark, along with state support for regional airports.
Tax minister Jeppe Bruus said on Thursday that the planned spending would benefit ”two good causes”.
Nawa said her party does not think more should be spent on the elderly welfare “right now”.
“On the contrary, our gaze is focused ahead on green transition, climate, children, young people and education,” she said.
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