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Business

Germany Mulls Tax on Jet Fuel

According to Financial Times Deutschland, German Finance Minister Hans Eichel is considering levying gas tax on jet fuel for domestic flights and introducing VAT on international flights. The paper reported that the fuel tax would be levied if the other ministers of the German cabinet fail to cooperate with Eichel's planned spending cuts of €2 billion euros and subsidy reductions of €1.7 billion. A tax on jet fuel wouldn't need the backing of the upper house of parliament, which is controlled by the opposition CDU, who blocked the introduction of VAT on international flights last year. The proposal has been rejected by airlines such as Lufthansa and welcomed by environmental groups, who believe a jet fuel tax is long overdue given that the aviation industry is highly environmentally damaging.