Norwegian government to reintroduce air passenger tax

The Norwegian government is planning to reintroduce the air passenger tax and normal VAT rates from November 1.

The Progress Party (FRP) has reacted to the news, warning that a taxation discussion will take place in the Norwegian parliament (Storting).

The Storting has adopted several tax cuts in connection with the coronavirus crisis.

Among other things, the air passenger tax has been abolished between January 1 and October 31, and the low tax rate for VAT, which is usually 12%, has been reduced to 6% in the period between April 1 and October 31.

On Monday, the government confirmed that it would not extend these measures.

That prompted FRP’s parliamentary representative Sivert Bjørnstad to react.

Bjørnstad noted that the Norwegian aviation industry needed all the help it could get.

Broken back

“The industry’s back is almost broken – anything that can help remedy the situation would be wise, and a reintroduction of the air passenger tax does not remedy it”, he said.

Bjørnstad noted that he did not understand why the low VAT rate is proposed to be raised back from 6 to 12%.

“It includes, among other things, passenger transport, accommodation, museums, and amusement parks. Those are also part of an industry that is struggling, and it will of course not be easy to find a solution”, he added.

Bjørnstad warned of a fight on tax and duty relief when the government’s latest crisis package comes up for consideration in the Storting and in the negotiations on the state budget.

Not enough

In the crisis package proposal presented on Monday, the government pointed out that the airlines’ challenges are mainly due to a lack of revenue and weak liquidity.

“Abolishing the fee for another period will be an insufficiently targeted measure to alleviate the airlines’ difficulties. The fee is paid per passenger who flies”, the government wrote.

As for the cut in the low rate, the government noted that it would also not be targeted enough at supporting companies with financial problems due to the coronavirus pandemic.

The low rate applies to passenger transport, accommodation, public broadcasting, access to cinemas, museums, amusement parks, and major sporting events.

© NTB Scanpix / #Norway Today