Swedish government commission proposes airline climate tax

STOCKHOLM (Reuters) - A government-appointed commission recommended on Wednesday that airlines operating in Sweden should pay a tax of between 80 and 430 Swedish crowns ($9-47) per passenger and flight to compensate for climate pollution.

One the levy is instituted, the cost of a domestic flight would rise by 80 crowns and an international flight by 280 to 430 and crowns, depending on the distance of the flight.

Under current rules in the Nordic state, airlines pay value-added tax of 6 percent on domestic flights while international flights are exempt from VAT.

The centre-left government’s plans for an airline tax has been criticized by opposition parties who say it would do little to reduce carbon dioxide and would harm the airline industry.

The government is expected to incorporate a form of the proposal, possibly amended, within their next autumn budget in October 2017.

The commission proposed that the tax come into force on Jan. 1, 2018 and said it would be expected to raise around 1.75 billion Swedish crowns per year.

Reporting by Johan Ahlander; editing by Mark Heinrich