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Japan to sizably cut fuel tax on airlines amid epidemic

  • November 16, 2020
  • , Jiji Press , 10:10 p.m.
  • English Press

Tokyo, Nov. 16 (Jiji Press)–Japan’s government and ruling camp are planning to adopt a special measure to significantly reduce fuel tax paid by airlines, as part of fiscal 2021 tax system reforms, it was learned Monday.

 

They see the need to support Japanese carriers, which are seeing their earnings eroded by a plunge in travel demand amid the novel coronavirus pandemic, informed sources said.

 

Airlines pay the fuel tax based on the amount of fuel their airplanes use for domestic flights.

 

Currently, the tax is set at 18,000 yen per kiloliter of fuel, which is lower than the normal level.

 

The government and the ruling camp, led by the Liberal Democratic Party, will discuss lowering the amount to 4,000 yen only for fiscal 2021.

 

Among major domestic carriers, All Nippon Airways expects to report a record consolidated net loss of 510 billion yen for the year ending in March 2021, taking a hit from the coronavirus pandemic.

 

According to aviation industry data, the entire sector is estimated to incur an operating loss of about 1 trillion yen in the same year as revenue is seen plunging by more than 2 trillion yen from the previous year.

 

With the government aiming to attract 60 million visitors to Japan from abroad in 2030, meanwhile, many in the state and the ruling coalition are calling for airlines’ passenger transport capacities to be maintained, with an eye on a post-coronavirus era.

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