Avinor warns against VAT increase: – May lead to 15,000 fewer domestic departures

Strong growth at Oslo AirportOslo Airport.Photo: Avinor

Avinor estimates that 15,000 domestic flights a year can disappear if VAT on passenger transport is increased from 12 to 25 percent.

Today, there are three rates – 12, 15 and 25 percent, in addition to the zero rate. But a committee set up by the Ministry of Finance proposes to have a joint rate in place, and they have therefore proposed to introduce a single flat rate of 23 or 25 percent.

This could mean that VAT on passenger transport, which is currently 12 percent, will be higher. In its consultation response, Avinor estimates that 13,000 annual departures will disappear if the value added tax is increased to 23 percent, and 15,000 departures if the new common VAT rate becomes 25 percent, the Nation writes.

Widerøe writes in its consultation response that they may have to halve operations, which will cause 37 domestic routes to disappear.

The state-owned limited company estimates that prices will increase between 10 and 11 percent for private travelers. Avinor also expects to lose more than NOK 200 million annually due to fewer departures.

When Finance Minister Siv Jensen (Frp) was handed the report of a flat value-added tax, she said that she did not think it would be appropriate to remove all the reduced value added tax.

“I do not therefore think that the government will propose to remove all low and zero VAT rates as proposed by the committee,” she said.

© NTB Scanpix / #Norway Today

RSS Feed