Swedish government pushes for airline climate tax

The Swedish Social Democrat-Green Party government wants to bring in a climate tax on flights as part of its autumn budget - a move that would hike up ticket prices.

According to the government's recommendation, airlines operating in Sweden should pay a tax of between SEK 80 and SEK 430 per passenger and flight to compensate for climate pollution. The lower fees will apply to domestic and EU flights, and the highter rates apply to long-haul journeys.

Under current Swedish rules, airlines pay value-added tax of 6 percent on domestic flights while international flights are exempt from VAT. The new airline tax is meant to compensate for the lack of VAT on international flights and for the low price airlines pay for greenhouse-gas emissions.

The proposal could be included in the 2018 budget bill, and the tax would then take effect on January 1st next year.

Deputy Finance Minister Per Bolund said the money from the flight tax would be used to help job creation by cutting employer fees for small companies’ first hires. That way, an estimated 30,000 jobs could be created, according to Bolund.

Opposition parties have strongly criticised the move, but unless they decide to bring down the government with a joint budget motion of their own, the flight tax will likely pass a vote in the Swedish parliament.

Criticism has also been raised within the ruling Social Democrat Party, for instance by Councilor Niklas Nordström of the northern city of Luleå. He is also chairman of the Swedish Air Transport Society, an association for Sweden’s air industry.

“This makes movement more difficult,” Nordström told news agency TT. "It will not make life easier for us. In large parts of northern Sweden, flights are used as public transport."

The economic policy spokesperson for the opposition Center Party, Emil Källström, has said that if the Alliance coalition, which the Centre Party is part of, wins the election in autumn 2018, it will scrap the tax.

In 2009, the Swedish parliament decided that, by 2020, Sweden's emissions should be cut to 40 percent of 1990's levels. However, the parties in the parliament are not agreed on the best way to reach this target.

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