The federal government has moved to reassure the aviation industry that the newly enacted tax laws are designed to support, rather than hinder, airline operations, amid growing public concern over potential fare increases.
Acknowledging the genuine challenges facing the sector, particularly the weight of multiple taxes, levies, and regulatory charges, the Presidential Fiscal Policy and Tax Reforms Committee said it has engaged extensively with airline operators and will continue to do so.
“Contrary to the claim that the new tax laws will hurt the industry, the reform is part of the solution, not the source of the problem,” the committee said in a statement.
It added: “Several long-standing tax issues driving costs in the sector have been resolved in the new tax laws or are being structurally addressed.”
One of the most significant relief measures is the overhaul of the withholding tax on aircraft leases. Previously set at 10 percent, this levy has been removed and will be replaced with a rate determined by regulation, creating the legal basis for either a full exemption or a significantly lower rate.
