- Email: [email protected]
Air transport tax and its consequences on tourisms
Annals of Tourism Research, Vol. 20, pp. 450-460, Printed
in the USA.
1993
All rights reserved.
Copyright
AIR TRANSPORT CONSEQUENCES
0
0160-7383/93 $6.00 + .OO 1993 PergamJn Press Ltd.
TAX AND ITS ON TOURISM R. I. R. Abeyratne McGill University, Canada
Abstract: Since 1990, a worldwide proliferation of taxes on civil aviation has raised numerous protests from the airline industry. A typical example was the proposed the USTTA’s facilitation fee, which required airlines and passenger shipping lines to pay a “user fee” on foreign nationals. This imposition was perceived to be “discriminatory” in that it required foreigners to bear the costs of promoting tourism to the United States. This paper defines the term “tax” and “charge,” raises issues emerging as a result of such taxations, discusses international responses to this development, and concludes that both international air transport and tourism are inextricably linked to each other and to tax one in order to develop the other would be a self-defeating measure. Keywords: tax, air transport, ICAO, IATA, law. R&urn&: Les taxes sur le transport atrien et ses cons&quences pour le tourisme. Depuis 1990 une prolif&ation au niveau mondial de taxes imposCes 2 l’aviation civile a produit de nombreuses protestations de la part de l’industrie aCrienne. L’imposition d’une charge de facilitation proposte par I’USTTA, laquelle exige des compagnies atriennes et des compagnies maritimes de transport de passagers de payer une “redevance d’usage” pour les ressortissants &rangers, en est un exemple typique. Cette imposition fut perCue comme &ant “discriminatoire” Ctant donnC qu’elle exige
INTRODUCTION The airline industry has, in the recent past, been adversely affected by three phenomena: the recession, the Gulf war, and indirect taxation of air travel (Gallacher 1992:28). The last phenomenon is alleged to R. I. R. Abeyratne (Institute of Air and Space Law, McGill University, 3661 Peel Street, Montreal HSAlXl, Canada), an aviation consultant, has published numerous articles on international law and air law in leading law journals. He is a Fellow of the Chartered Institute of Transport, and a Member of the Royal Aeronautical Society, the British Association of Aviation Consultants, and the International Law Association (Headquarters), and a doctoral research scholar at the Institute of Air and Space Law, McGill University, Montreal, Canada. 450
R. I. R. ABEYRATNE
451
be the most audacious. Among the many airline and ticket taxes, value added taxes (VAT) and passenger charges that are now charged, is a new hybrid called the “tourism tax.” This tax is ostensibly aimed at developing tourism in the country whose government imposes the tax. A typical example was the proposed United States Travel and Tourism Administration (USTTA) facilitation fee. This fee came into being when the Omnibus Budget Reconciliation Act of 1990 (Budget Act) amended the existing International Travel Act of 1961 to require airlines and passenger shipping lines to pay a “user fee.” This tax, called the USTTA Fee, was seemingly intended to supplement US Government coffers and pay for costs incurred by the US Government in the administration of tourism to the country. The fee was imposed on airlines and passenger shipping lines that bring in foreign nationals who are on business or holiday. In view of its blatant incompatibility with the logic that income from taxes on international civil aviation should be solely used to develop international civil aviation and not to enrich the government treasury or for general public purposes, the International Air Transport Association (IATA) has called this user fee on tourism administration “plain discriminatory.” IATA has protested strongly that the US Government, by imposing this so-called “facilitation fee” and requiring foreigners to bear the costs of promoting tourism to the United States, is really taxing an activity that the government is trying to encourage. More recently, IATA vigorously opposed a “travel tax” that the Government of Finland was proposing to impose on all travelers leaving the country with tickets purchased in Finland. As a final desperate measure, some US airlines and travel agents have now begun attaching a message to ticket folders that the price of the ticket includes taxes and fees imposed on air transportation, quoting inter alz’u, the $1 .OO US Travel and Tourism fee. This fee would have cost the airlines an estimated $20 million annually. On 4 February 1992, however, the US Department of Commerce’s Travel and Tourism Administration issued its final rule that obviated the $1 facilitation fee levied per international passenger carried, on the grounds of its inconsistency with the Chicago Convention. The Convention on International Civil Aviation, signed at Chicago on 7 December 1944, Article 15, provides, inter al&z, that no fees, dues, or other charges shall be imposed by any contracting State in respect solely of the right of transit over or entry into or exit from its territory of any aircraft of a contracting State of persons or property thereon (ICAO 1980). The 1992 USTTA rule operates retrospectively to all fees not collected for the first quarter of 1991 and thereafter. Notably, the ruling was given after 120 requests from airlines and airline representatives had flowed in to the US Department of Commerce, asking for exemptions from the fee on the grounds that the imposition of the fee was diametrically opposed to the norms of international treaties and agreements. In rescinding the fee, the US Department of Commerce, in a formal statement, stated: We are committed to exploring alternative funding sources to support the work of our agency [USTTA] but the facilitation fee is inconsis-
AIR TRANSPORT
452
TAX
tent with international treaties and therefore an unsuitable way to achieve it (Aviation Daily 1992:207). It is incontrovertible that on this issue, both international civil aviation and the tourism industry are inextricably linked. On the one hand, it is claimed that airlines are asked to pay for tourism development. On the other, since the traveler would ultimately bear the burden of this tax, he/she would pay to develop tourism in the country in which he has his sojourn. This makes the airline a “tax collector” (Gallacher 1992) and the traveler a “tax payer” in a foreign country. Either way, the government that imposes a tourism tax is making persons (who are not morally required) pay for carrying out a responsibility that really devolves upon the government concerned. This paper would analyze this inconsistency. IMPOSITION
OF AIR FEE AND TOURISM
Definitions and Interpretations A tax has been defined as a “pecuniary contribution made by persons liable, for the support of government” (Black’s Law Dictionary 1990). In judicial parlance, a tax has been accepted to be “a pecuniary burden laid upon individuals or property to support the government and is a payment exacted by legislative authority.” It has also been identified as “annual compensation paid to government for annual protection and for current support of government.” A classical definition of a tax in an early American decision reads: A ratable portion of the produce of the property and labour of the individual citizens, taken by the nation, in the exercise of its sovereign rights, for the support of government, for the administration of the laws, and as the means for continuing in operation the various legitimate functions of the State (New London v. Miller in Connecticut Reporter 1941:112). According to these definitions, a tax is a very general imposition, often described as a “once and for all” payment. Therefore, a tax could not be named, as a specific tax, such as “aviation fuel tax” or “aircraft equipment tax.” The fact that a tax was levied “for the support of the government” makes its general nature more explicit. In the case of Heirs v. Mitchell (Southern Reporter 1956:81), the court held that a tax was: An enforced contribution of money or other property, assessed in accordance with some reasonable rule or apportionment by authority of some sovereign State on persons or property within its jurisdiction for the purpose of defraying the public expenses. Therefore, a tax came to be known as a “contribution” and was regarded in a general sense to be any contribution imposed by government upon individuals, for the use and service of the State, whether under the name of toll, tribute, tallage, gable, impost, duty, custom, excise, subsidy, supply, aid or any other name.
R. I. R. ABEYRATNE
453
A charge has reference to impositions for improvements that are especially beneficial to particular individuals or property, and are imposed in proportion to the benefits supposed to be conferred. Charges are special and local impositions upon property in the immediate vicinity of municipal improvements and are laid with reference to the special benefit that the property is expected to have derived therefrom. In a broader sense, taxes, as have been judicially defined, could be considered as including assessments and charges. But practically, a “tax” is a public burden imposed generally on the inhabitants of a State or upon a division thereof for governmental purposes, without reference to particular or peculiar benefits to particular individuals or property. The main criticism of a tax is that it is a compulsory contribution levied upon persons. . . . for the support of government (Hinshaw 1939:81) and, therefore, is a heavy demand upon one’s person or resources. As for the international airlines, they pay taxes like any other income generating enterprise. Conceptually, there is nothing wrong with this system except that, in recent times, taxation of the air transport industry has become an intractable problem. Its magnitude was recently highlighted in the United States, when chief executive officers of major US carriers requested the Secretary of Transport that airlines in the United States be allowed to buy jet fuel from US Government’s strategic oil reserves at sensible prices (preferably, at prices that existed before 2 August 1990 when Iraq invaded Kuwait). Taxation of international air transport has been causing the air transport industry major concern over a sustained period of time. In July 1989, IATA recorded that some 184 countries around the world imposed 500 different ticket and airport taxes, charges, and fees on the sale or use of international air transport. Some of these were customs, immigration, and security charges. IATA argued that they were the responsibility of the States and should not be borne by the airlines and their passenger and shipper customers. Earlier, IATA had called on airlines to resist new government-imposed taxes. There is now an increasing awareness of such tax concepts as value-added tax (VAT) on international air transport services, passenger facility charges (PFC), airport security charges, air ticket surcharges, and even those that are loosely termed as general aviation fees. Of all these, perhaps the most contentious issue is the PFC in the United States, where its imposition is sought to improve the nation’s transportation system by alleviating the airport capacity problem. Most charges that are imposed on air transport are regarded more as a panacea to the financially debilitated international air transport industry. A charge levied upon the use of international air transport is expected to be utilised in the improvement of that industry, while a tax is generally imposed in the national interest and is directed accordingly towards the national treasury. In concept, the former is not objectionable, since it is calculated to benefit a particular industry for which the charge is collected, while the latter, it is claimed, should be borne by States as part of their national responsibility. However, this clear demarcation has often been shrouded in anomalous terminology result-
454
AIR TRANSPORT
TAX
ing in a passenger service charge being identified as a tax imposed for the national benefit. A legal opinion left the confusion worse confounded by stating that aviation taxes may be used only for aviation purposes. Categories
of TaxeJ
Inasmuch as the PFC is the most contentious current issue, tax imposed on aviation fuel is the most important (Lupton 1935:176). Aviation fuel costs represent 10 % to 25 % of variable costs of an average airline. A small airline may have to bear even as much as 40% of its operating costs on the purchase of fuel. The volatile fluctuation of the world fuel market, and the rapidly changing economic conditions would bear upon the fortune of an international carrier. Any taxes imposed upon aviation fuels, however small, would have a significant impact on aviation fuel costs and would, therefore, have a significant impact on an airline’s budgetary and cash flow management. For this reason, there is growing concern over the question of taxation of aviation fuels and attempts would be pursued in the future by IATA to negotiate reductions in fuel facility charges and taxes (Batik 1990: 11). International airlines and other air transport enterprises face taxation conventionally in two broad areas that may be termed “consumption” taxes and “revenue” taxes. The first category comprises taxes related to consumption by air transport enterprises and airlines. These are property taxes on aircraft engaged in international air transportation, as well as taxes on fuel and ground equipment and spare parts and aircraft equipment. The latter group envelops income tax (whether it be based on gross receipts or any other evaluation) based primarily on the sale or use of international transport by air, business taxes, municipal taxes, employees taxes, capital gains taxes, etc. There is a third category which, by some, has been termed “nuisance” tax (Gorecki 1958: 1031): head taxes such as the PFC, airport taxes, security taxes, etc., as already noted. The “nuisance” tax is generally absorbed by the passenger or client of the airline or air transport enterprise and is, therefore, not a direct tax imposed on the air transport industry. the most inscrutable happens to be the Of these three categories, now controversial PFC of the United States. As was discussed earlier, the passenger services charge is being confused with the conventional definition of a tax. The PFC and the rules for its implementation were drafted by the Department of Transport (DOT) and published on 3 May 1991. However, a provision permitting airports to impose a $1, $2, or $3 fee had already been included in the initial legislation. The purpose of levying the PFC - to ensure “public benefit” relating to aviation, is typified in the concurrent enactment of the national noise policy where “addressing the PFC and the noise provisions in a single bill to ensure more capacity with less noise was a brilliant legislative stroke” (Airport Support 199 1: 3). On the one hand, proponents of the PFC argue that its levy would assist the financial plans of 60 out of 100 of the busiest airports in the United States which are presently undergoing expansion programs. It is further argued that legislation allowing US airports to levy the PFC
R. I. R. ABEYRATNE
455
to help finance capacity improvements could well break the back of existing funding problems. On the other, its chief detractors maintain that government should not be subsidized by airlines, or individuals who use air transport. The solution to the problem of confusion between the various definitions of taxes and PFCs may be found in viewing it as a “fee, n “toll,” or “user charge,” imposed merely to compensate the authorities for the costs of the services rendered. The levy should be an equitable means of raising revenues and not an arbitrary one related to costs. It should also have political acceptance and constitutional rectitude. According to IATA, “tax” is an impost for raising revenue for the general treasury and which will be used for general public purposes; “charge” is an impost for raising revenue for specific aviation related facilities and charges; and “fee” is another name for “tax” or “charge” depending upon what the revenue is used for” (IATA 1989: 1). IATA observes that during a period when the airline industry is facing hard times, governments are urging the carriers to offer low fares and then hitting them with new taxes and charges (International Air Letter 1991:2). IATA further claims that the international airline industry could be crippled by the increasing burden of taxes presently being imposed by governments. A fortiori, IATA’s complaint is that the imposition of such taxes are “discriminatory,” whereby one could well deduce that IATA imputes to these “taxes” an absence of political acceptability and constitutional consistence. IATA’s main interest in the area of taxation in international air transport is to protect its member airlines from any tax, charge, or levy. The principle behind this approach is that, in the present context, where there is an acute recession affecting air transport, airlines should not be further burdened by being required to pay for what IATA calls the responsibilities of individual States. Policy Issues The legal definition of a tax, as already noted, is that it is an enforced contribution by the public or section thereof, introduced by legislative decree, for the purposes of defraying public expenses. Judicially, a tax has been identified as a “contribution,” among other synonyms. Experts in taxation maintain that the “efficiency” test in taxation calls for devising tax levies that cause minimal reduction in or disruption of overall productivity of a society (Harris 1983: 15). It is in this perspective that the overall context of taxation in the field of international air transport should be viewed. In many instances, “taxes” imposed on international air transport have been labeled iniquitous. It is strongly claimed that a tax that is “a compulsory contribution levied upon persons, property, or business for the support of government: any assessment” is an onerous demand upon any one’s person or resources and when imposed upon international air transport justifies its definition as a verb-“to subject to a severe strain.” While it is accepted that taxation must be for a public purpose, the amount of the tax charged must be compatible with principles of commerce and should be proportionate to the cost of the
456
AIR TRANSPORT
TAX
specific facility or services used rather than the cost of overall governmental services in general. The formula must admit of the tax being directly proportionate to the cost of the service or facility used. The International Civil Aviation Organization (created in 1944 to promote the safe and orderly development of worldwide civil aviation) is a specialized agency of the United Nations responsible for civil aviation affairs. ICAO sets international standards and regulations necessary for the safety, security, efficiency, and regularity of air transport and serves as the medium for cooperation in all fields of international civil aviation among its 176 contracting States. In November 1966, the Council of this Organization adopted, inter alia, a resolution on taxes related to the sale or use of international air transport whereby the Council resolved: (a) that each Contracting State shall reduce to the fullest practicable extent and make plans to eliminate as soon as its economic conditions permit all forms of taxation on the sale or use of international transport by air, including taxes on gross receipts of operators and taxes levied directly on passengers or shippers; (b) that each Contracting State shall notify the Organization of the extent to which it currently levies taxes on the sale or use of international transport by air and of the extent to which it is prepared to take action in accordance with the principles of this Resolution, and thereafter keep the Organization informed of any subsequent changes in its position vis-a-vis the Resolution; and (c) that the information thus received shall be published and transmitted to all Contracting States (ICAO 1966: 14). On this basis, if tourism-related taxes, such as the USTTA fee, are charged on the airlines, they would ineluctably come under the heading of taxes imposed on the sale of international air transport. Although ICAO treats taxation in the field of air transport primarily as a facilitation issue (Abeyratne 1991: 106-l 17), there is nonetheless the strong pronouncement by the Organization that this form of taxation is “a relatively inequitable form of taxation and can create a considerable obstacle to further development of air transport.” In one of its Commentaries, ICAO recognizes that sales taxes on tickets purchased for international air transport, where levied, increase the cost of air travel. It is not unreasonable to argue, therefore, that the worst affected by the increased cost of air travel would be the tourist. At the recently concluded ICAO Conference on Airport and Route in November 1991, the Secretariat Facility Management (CARFM) focused attention of the conference to the fact that there are charges levied on air transport which do not cover costs of functions required by civil aviation, and resolved that States should refrain from imposing charges for services and functions that are not associated (emphasis added) with international civil aviation (ICAO 1991:38). It is very much a fact for debate whether tourism is “associated with” international civil aviation and, if this be the case, whether States should be condoned if they imposed charges for services and functions related to tourism. If indeed the answer to this problem is in the affirmative, and if the USTTA fee and other similar ones go towards the enhancement, development, or administration of tourism, then it would seem (by the
457
R. I. R. ABEYRATNE
reasoning adopted by the CARFM such a fee would be permissible.
conference)
that the imposition
of
Tourism and Air Taxation
The most important attribute of tourism is that it is inextricably linked to transport as the latter is the necessary precondition of tourism (Burkhart and Medlic 1974:3). Tourism is a matter of being elsewhere, and to be elsewhere implies transport. According to internationally adopted definitions, a tourist is a temporary visitor staying at least 24 hours in the country he visits and the purpose of his visit is leisure. Any one who visits a country for a lesser period of time is an “excursionist.* Within these parameters, however, even a visitor on business would be categorized as a tourist and would accordingly be included as a business traveler, and so are the other two “visitor” categories of holidaymakers and common interest travelers, such as “visiting friends or relatives” (VFR). It is a general feature of any traveler to travel by the cheapest route, paying the cheapest fare. Even the smallest reduction in price in travel fare would significantly increase tourist traffic in most situations. Observations on the implacable sensitivity of the tourism industry to the inherent parsimony of the tourist are many. For example, “it is safe to suggest or to conclude that when prices fluctuate, “tourists’ money is spent where it goes farthest,” which is just another way of saying that tourists are very sensitive to prices in various tourism markets. Thus, the impact of economic fluctuation, the devaluation of and the restriction of tourism importing countries on the currency, amount of money to be taken out by their nationals will be felt in the tourism exporting countries” (Safari 1973). It is logical, therefore, to consider taxation on tourism as a negative feature. The watershed event of world tourism was the United Nations Conference on International Travel and Tourism Development held in Rome in 1963, which pronounced as tourism’s fundamental attribute its “contribution to the strengthening of the economies of all countries of economic activities . . . n Its theme . . . through the diversification of economic development was later read into the creation of the World Tourism Organization whose fundamental aim includes “the promotion and development of tourism with a view to contributing to economic development . . . ” (United Nations 1971:Annex, p. 1). Actually, the thread of economic development achieved through tourism runs through the entire fabric of community development. One of the main objectives of the Organization for Economic Cooperation and Development (OECD)-one of the strongest world bodies that promote tourism-is to achieve the highest sustainable economic growth in member countries and to contribute to sound economic expansion in member as well as non-member countries in the process of their development. Therefore, the foregoing discussion leaves no room for doubt that any economic constraint brought upon tourism would defeat the objectives of the industry and can lead to its decline. A basic concern of economicsthe study of production and of the
458
AIR TRANSPORT
TAX
wide spread use of unconventional means on an alternative or reciprocal basis (Lesourne 1963) -applies to tourism, together with the aphorism that economics teaches man to employ scarce resources to produce commodities over time for the use of his community (Samuelson 1967: 5). Analogically, the scarce resources as applicable to tourism are the various means of transport that support the backbone of the tourism industry. It would undoubtedly benefit the industry therefore, if transport were not regulated. Since this is by no means realistic in today’s world, particularly in air transport, the tourism industry is compelled to use this scarce resource in the most cost-effective manner. On the one hand, the tourism industry is trying to bring down the cost of travel. A world of low air fares and low overhead charges is its ultimate dream. On the other, the airline industry is constantly looking towards increasing air fares and the civil aviation world is attempting to increase landing charges, ground handling charges, and the like. Additional charges on tourism would only succeed in unhinging this imbalance further. CONCLUSIONS 1990 began with obstacles to international travel being obviated in Europe, with the crumbling of the Berlin Wall as a main signifier. Any hopes of this euphoria being permanent or long lived were shattered with the Iraqi invasion of Kuwait in August which jacked up energy prices and dampened the spirits of the traveler. Be that as it may, World Tourism Organization (WTO) figures reflect a record 415 million international arrivals in 1990, or 2.4 ‘$J above the 405 million recorded the previous year. The value of world tourism also increased by $21 billion (from $209 billion in 1989 to $230 billion in 1990) (Britannica Data Annual 1991:226). The International Civil Aviation Organization has recorded that annual passenger traffic declined in 1991 for the first time, although there is every sign of recovery late in the year and a growth in 1992. In addition, ICAO has released statistics that reflect a worldwide passenger upturn of 3 % in October 1990 over the same month in the previous year, and a 7% upturn in November 1990 on the same basis (Aviation Week and Space 1992:32). These figures are very encouraging and show a positive trend in the expansion of tourism worldwide. As already discussed, international air transport and tourism are inextricably linked. It may even be arguable that tourism could be “associated” with civil aviation, in which case, a charge levied on tourism would be generally permissible in principle. There is a caveat, and that any levy however, that the word “charge” is emphasized should be used for the development of the activity on whose name it is made. The fact that air transport is heavily regulated adds weight to this principle and makes any charge on tourism seem justifiable. A seemingly compelling argument for the charging of fees for tourism development is that the fares charged to the passenger do not cover the full cost to society of providing the transport in question (e.g., the construction of roads and railways, the expropriation of lands, and the maintenance of year-round tourism infrastructures to balance off-peak
R. I. R. ABEYRATNE
459
periods). Another ostensibly compelling argument in favor of the imposition of the tourism fee is that which supports the State in its endeavor to curb noise pollution and congestion and costs incurred therefore, where such a charge is considered a compensation for society that is “inconvenienced.” A more lofty justification often used is the “flag discrimination” theory where in some States, foreign carriers are charged a royalty or tourism charge for bringing in visitors to a country on the basis that the national carrier is deprived the privilege of carrying those tourists to its own country. If the above arguments were to prevail, then analogically a restaurant owner could charge the patrons a special fee for beautifying the restaurant and providing conveniences therein. The restaurateur could also impose a special charge when it is an off-peak period for the restaurant. The US Department of Commerce has given the most sensible and logically reasoned response to this question by rescinding its USTTA facilitation fee. It has used the most compelling source for its conclusion - the written word-After all, does not the Chicago Convention say in its Article 15 that no fees, dues or other charges shall be imposed by any contracting State in respect of the entry into or exit from its territory of any aircraft of a contracting State or persons or property thereon? The very thought that any country could contemplate imposing a special charge on tourism, therefore, becomes a legally and morally bankrupt one. 0 0 REFERENCES Abeyratne, R. I. R. 1991 Taxation in the Field of International Air Transport: Legal Aspects. Air Law 16:106-117. Airport Support 1991a Comment. Airport Support 9:3. Aviation Daily 1992 Commerce Department Pulls Facilitation Fee Paid by Carriers. Aviation Daily (February 4):207. Aviation Week and Space Technology 1992 ICAO Confirms Traffic Decline in 1991 Amid Hopes for New Growth by Summer. Aviation Week and Space Technology (January 13):32. Batik, Jerry 1990 Aviation Fuel: A Volatile Market. IATA Review 1:11-12. Black’s Law Dictionary 1990 Black’s Law Dictionary (6th ed). Saint Paul MN: West Publishing. Britannica Data Annual 1991 Britannica Data Annual. Chicago: Encyclopedia Britannica Inc. Burkart, A. J., and Medlick, S. 1981 Tourism: Past, Present and Future. London: Heinemann. Connecticut Reporter 1941 Connecticut Reporter. St. Paul MN: West Publishing. Gallacher, Jacqueline 1992 Taxing Times. Airline Business Uanuary):28-30. Gorecki. H. 1. 1958 international Airline Taxes and Charges. Interavia 10:1031. 1991 Outlook Gloomv at IATA if Airline Taxes Continue to Rise. Interavia Air Letter (16 January):2. Harris, Edwin C. 1983 Canadian Income Tax. Stoneham MA: Butterworths.
460
AIR
TRANSPORT
TAX
Hinshaw, Hainer 1939 The Protection of Aviation from Inequitable Taxation. Journal of Air Law 9: 75-94. IATA 1989 IATA List of Ticket and Airport Taxes and Fees (Vol. 1). Montreal: IATA. ICAO 1966 ICAO’s Policies on Taxation in the Field of International Air Transport (ICAO Dot 8632-C/968). Montreal: International Civil Aviation Organization. 1980 The Chicago Convention (ICAO Dot 7300/6, 6th ed.), Montreal: Intemational Civil Aviation Organization. 1991 Conference on Airport and Route Facility Management (ICAO Dot 9579CARFM 1991). Montreal: International Civil Aviation Organization. v Interavia Air Letter ’ 1991 Interavia Air Letter. Coulsdon UK: Sentinel House. Jafari, Jafar 1973 Role of Tourism on Socio-Economic Transformation of Developing Countries, M.S. Thesis, Cornell University, USA. Lesoume, Jacques 1963 Economic Analysis and Industrial Management. Englewood Cliffs NJ: Prentice-Hall. Lupton, G. W. 1935 Civil Aviation Law. Chicago: Callaghan. Samuelson, Paul A. 1989 Economics. New York: McGraw-Hill. Southern Reporter 1956 Southern Reporter. St. Paul MN: West Publishing. United Nations 1971 United Nations Economic and Social Council (15th Session), Agenda Item 12(b), Dot E/4955:24/2/71. New York: United Nations. Submitted 10 March 1992 Accepted 22 June 1992 Final version submitted 15 July Refereed anonymously Coordinating Editor: Alexander
1992 Anolik
in the USA.
1993
All rights reserved.
Copyright
AIR TRANSPORT CONSEQUENCES
0
0160-7383/93 $6.00 + .OO 1993 PergamJn Press Ltd.
TAX AND ITS ON TOURISM R. I. R. Abeyratne McGill University, Canada
Abstract: Since 1990, a worldwide proliferation of taxes on civil aviation has raised numerous protests from the airline industry. A typical example was the proposed the USTTA’s facilitation fee, which required airlines and passenger shipping lines to pay a “user fee” on foreign nationals. This imposition was perceived to be “discriminatory” in that it required foreigners to bear the costs of promoting tourism to the United States. This paper defines the term “tax” and “charge,” raises issues emerging as a result of such taxations, discusses international responses to this development, and concludes that both international air transport and tourism are inextricably linked to each other and to tax one in order to develop the other would be a self-defeating measure. Keywords: tax, air transport, ICAO, IATA, law. R&urn&: Les taxes sur le transport atrien et ses cons&quences pour le tourisme. Depuis 1990 une prolif&ation au niveau mondial de taxes imposCes 2 l’aviation civile a produit de nombreuses protestations de la part de l’industrie aCrienne. L’imposition d’une charge de facilitation proposte par I’USTTA, laquelle exige des compagnies atriennes et des compagnies maritimes de transport de passagers de payer une “redevance d’usage” pour les ressortissants &rangers, en est un exemple typique. Cette imposition fut perCue comme &ant “discriminatoire” Ctant donnC qu’elle exige
INTRODUCTION The airline industry has, in the recent past, been adversely affected by three phenomena: the recession, the Gulf war, and indirect taxation of air travel (Gallacher 1992:28). The last phenomenon is alleged to R. I. R. Abeyratne (Institute of Air and Space Law, McGill University, 3661 Peel Street, Montreal HSAlXl, Canada), an aviation consultant, has published numerous articles on international law and air law in leading law journals. He is a Fellow of the Chartered Institute of Transport, and a Member of the Royal Aeronautical Society, the British Association of Aviation Consultants, and the International Law Association (Headquarters), and a doctoral research scholar at the Institute of Air and Space Law, McGill University, Montreal, Canada. 450
R. I. R. ABEYRATNE
451
be the most audacious. Among the many airline and ticket taxes, value added taxes (VAT) and passenger charges that are now charged, is a new hybrid called the “tourism tax.” This tax is ostensibly aimed at developing tourism in the country whose government imposes the tax. A typical example was the proposed United States Travel and Tourism Administration (USTTA) facilitation fee. This fee came into being when the Omnibus Budget Reconciliation Act of 1990 (Budget Act) amended the existing International Travel Act of 1961 to require airlines and passenger shipping lines to pay a “user fee.” This tax, called the USTTA Fee, was seemingly intended to supplement US Government coffers and pay for costs incurred by the US Government in the administration of tourism to the country. The fee was imposed on airlines and passenger shipping lines that bring in foreign nationals who are on business or holiday. In view of its blatant incompatibility with the logic that income from taxes on international civil aviation should be solely used to develop international civil aviation and not to enrich the government treasury or for general public purposes, the International Air Transport Association (IATA) has called this user fee on tourism administration “plain discriminatory.” IATA has protested strongly that the US Government, by imposing this so-called “facilitation fee” and requiring foreigners to bear the costs of promoting tourism to the United States, is really taxing an activity that the government is trying to encourage. More recently, IATA vigorously opposed a “travel tax” that the Government of Finland was proposing to impose on all travelers leaving the country with tickets purchased in Finland. As a final desperate measure, some US airlines and travel agents have now begun attaching a message to ticket folders that the price of the ticket includes taxes and fees imposed on air transportation, quoting inter alz’u, the $1 .OO US Travel and Tourism fee. This fee would have cost the airlines an estimated $20 million annually. On 4 February 1992, however, the US Department of Commerce’s Travel and Tourism Administration issued its final rule that obviated the $1 facilitation fee levied per international passenger carried, on the grounds of its inconsistency with the Chicago Convention. The Convention on International Civil Aviation, signed at Chicago on 7 December 1944, Article 15, provides, inter al&z, that no fees, dues, or other charges shall be imposed by any contracting State in respect solely of the right of transit over or entry into or exit from its territory of any aircraft of a contracting State of persons or property thereon (ICAO 1980). The 1992 USTTA rule operates retrospectively to all fees not collected for the first quarter of 1991 and thereafter. Notably, the ruling was given after 120 requests from airlines and airline representatives had flowed in to the US Department of Commerce, asking for exemptions from the fee on the grounds that the imposition of the fee was diametrically opposed to the norms of international treaties and agreements. In rescinding the fee, the US Department of Commerce, in a formal statement, stated: We are committed to exploring alternative funding sources to support the work of our agency [USTTA] but the facilitation fee is inconsis-
AIR TRANSPORT
452
TAX
tent with international treaties and therefore an unsuitable way to achieve it (Aviation Daily 1992:207). It is incontrovertible that on this issue, both international civil aviation and the tourism industry are inextricably linked. On the one hand, it is claimed that airlines are asked to pay for tourism development. On the other, since the traveler would ultimately bear the burden of this tax, he/she would pay to develop tourism in the country in which he has his sojourn. This makes the airline a “tax collector” (Gallacher 1992) and the traveler a “tax payer” in a foreign country. Either way, the government that imposes a tourism tax is making persons (who are not morally required) pay for carrying out a responsibility that really devolves upon the government concerned. This paper would analyze this inconsistency. IMPOSITION
OF AIR FEE AND TOURISM
Definitions and Interpretations A tax has been defined as a “pecuniary contribution made by persons liable, for the support of government” (Black’s Law Dictionary 1990). In judicial parlance, a tax has been accepted to be “a pecuniary burden laid upon individuals or property to support the government and is a payment exacted by legislative authority.” It has also been identified as “annual compensation paid to government for annual protection and for current support of government.” A classical definition of a tax in an early American decision reads: A ratable portion of the produce of the property and labour of the individual citizens, taken by the nation, in the exercise of its sovereign rights, for the support of government, for the administration of the laws, and as the means for continuing in operation the various legitimate functions of the State (New London v. Miller in Connecticut Reporter 1941:112). According to these definitions, a tax is a very general imposition, often described as a “once and for all” payment. Therefore, a tax could not be named, as a specific tax, such as “aviation fuel tax” or “aircraft equipment tax.” The fact that a tax was levied “for the support of the government” makes its general nature more explicit. In the case of Heirs v. Mitchell (Southern Reporter 1956:81), the court held that a tax was: An enforced contribution of money or other property, assessed in accordance with some reasonable rule or apportionment by authority of some sovereign State on persons or property within its jurisdiction for the purpose of defraying the public expenses. Therefore, a tax came to be known as a “contribution” and was regarded in a general sense to be any contribution imposed by government upon individuals, for the use and service of the State, whether under the name of toll, tribute, tallage, gable, impost, duty, custom, excise, subsidy, supply, aid or any other name.
R. I. R. ABEYRATNE
453
A charge has reference to impositions for improvements that are especially beneficial to particular individuals or property, and are imposed in proportion to the benefits supposed to be conferred. Charges are special and local impositions upon property in the immediate vicinity of municipal improvements and are laid with reference to the special benefit that the property is expected to have derived therefrom. In a broader sense, taxes, as have been judicially defined, could be considered as including assessments and charges. But practically, a “tax” is a public burden imposed generally on the inhabitants of a State or upon a division thereof for governmental purposes, without reference to particular or peculiar benefits to particular individuals or property. The main criticism of a tax is that it is a compulsory contribution levied upon persons. . . . for the support of government (Hinshaw 1939:81) and, therefore, is a heavy demand upon one’s person or resources. As for the international airlines, they pay taxes like any other income generating enterprise. Conceptually, there is nothing wrong with this system except that, in recent times, taxation of the air transport industry has become an intractable problem. Its magnitude was recently highlighted in the United States, when chief executive officers of major US carriers requested the Secretary of Transport that airlines in the United States be allowed to buy jet fuel from US Government’s strategic oil reserves at sensible prices (preferably, at prices that existed before 2 August 1990 when Iraq invaded Kuwait). Taxation of international air transport has been causing the air transport industry major concern over a sustained period of time. In July 1989, IATA recorded that some 184 countries around the world imposed 500 different ticket and airport taxes, charges, and fees on the sale or use of international air transport. Some of these were customs, immigration, and security charges. IATA argued that they were the responsibility of the States and should not be borne by the airlines and their passenger and shipper customers. Earlier, IATA had called on airlines to resist new government-imposed taxes. There is now an increasing awareness of such tax concepts as value-added tax (VAT) on international air transport services, passenger facility charges (PFC), airport security charges, air ticket surcharges, and even those that are loosely termed as general aviation fees. Of all these, perhaps the most contentious issue is the PFC in the United States, where its imposition is sought to improve the nation’s transportation system by alleviating the airport capacity problem. Most charges that are imposed on air transport are regarded more as a panacea to the financially debilitated international air transport industry. A charge levied upon the use of international air transport is expected to be utilised in the improvement of that industry, while a tax is generally imposed in the national interest and is directed accordingly towards the national treasury. In concept, the former is not objectionable, since it is calculated to benefit a particular industry for which the charge is collected, while the latter, it is claimed, should be borne by States as part of their national responsibility. However, this clear demarcation has often been shrouded in anomalous terminology result-
454
AIR TRANSPORT
TAX
ing in a passenger service charge being identified as a tax imposed for the national benefit. A legal opinion left the confusion worse confounded by stating that aviation taxes may be used only for aviation purposes. Categories
of TaxeJ
Inasmuch as the PFC is the most contentious current issue, tax imposed on aviation fuel is the most important (Lupton 1935:176). Aviation fuel costs represent 10 % to 25 % of variable costs of an average airline. A small airline may have to bear even as much as 40% of its operating costs on the purchase of fuel. The volatile fluctuation of the world fuel market, and the rapidly changing economic conditions would bear upon the fortune of an international carrier. Any taxes imposed upon aviation fuels, however small, would have a significant impact on aviation fuel costs and would, therefore, have a significant impact on an airline’s budgetary and cash flow management. For this reason, there is growing concern over the question of taxation of aviation fuels and attempts would be pursued in the future by IATA to negotiate reductions in fuel facility charges and taxes (Batik 1990: 11). International airlines and other air transport enterprises face taxation conventionally in two broad areas that may be termed “consumption” taxes and “revenue” taxes. The first category comprises taxes related to consumption by air transport enterprises and airlines. These are property taxes on aircraft engaged in international air transportation, as well as taxes on fuel and ground equipment and spare parts and aircraft equipment. The latter group envelops income tax (whether it be based on gross receipts or any other evaluation) based primarily on the sale or use of international transport by air, business taxes, municipal taxes, employees taxes, capital gains taxes, etc. There is a third category which, by some, has been termed “nuisance” tax (Gorecki 1958: 1031): head taxes such as the PFC, airport taxes, security taxes, etc., as already noted. The “nuisance” tax is generally absorbed by the passenger or client of the airline or air transport enterprise and is, therefore, not a direct tax imposed on the air transport industry. the most inscrutable happens to be the Of these three categories, now controversial PFC of the United States. As was discussed earlier, the passenger services charge is being confused with the conventional definition of a tax. The PFC and the rules for its implementation were drafted by the Department of Transport (DOT) and published on 3 May 1991. However, a provision permitting airports to impose a $1, $2, or $3 fee had already been included in the initial legislation. The purpose of levying the PFC - to ensure “public benefit” relating to aviation, is typified in the concurrent enactment of the national noise policy where “addressing the PFC and the noise provisions in a single bill to ensure more capacity with less noise was a brilliant legislative stroke” (Airport Support 199 1: 3). On the one hand, proponents of the PFC argue that its levy would assist the financial plans of 60 out of 100 of the busiest airports in the United States which are presently undergoing expansion programs. It is further argued that legislation allowing US airports to levy the PFC
R. I. R. ABEYRATNE
455
to help finance capacity improvements could well break the back of existing funding problems. On the other, its chief detractors maintain that government should not be subsidized by airlines, or individuals who use air transport. The solution to the problem of confusion between the various definitions of taxes and PFCs may be found in viewing it as a “fee, n “toll,” or “user charge,” imposed merely to compensate the authorities for the costs of the services rendered. The levy should be an equitable means of raising revenues and not an arbitrary one related to costs. It should also have political acceptance and constitutional rectitude. According to IATA, “tax” is an impost for raising revenue for the general treasury and which will be used for general public purposes; “charge” is an impost for raising revenue for specific aviation related facilities and charges; and “fee” is another name for “tax” or “charge” depending upon what the revenue is used for” (IATA 1989: 1). IATA observes that during a period when the airline industry is facing hard times, governments are urging the carriers to offer low fares and then hitting them with new taxes and charges (International Air Letter 1991:2). IATA further claims that the international airline industry could be crippled by the increasing burden of taxes presently being imposed by governments. A fortiori, IATA’s complaint is that the imposition of such taxes are “discriminatory,” whereby one could well deduce that IATA imputes to these “taxes” an absence of political acceptability and constitutional consistence. IATA’s main interest in the area of taxation in international air transport is to protect its member airlines from any tax, charge, or levy. The principle behind this approach is that, in the present context, where there is an acute recession affecting air transport, airlines should not be further burdened by being required to pay for what IATA calls the responsibilities of individual States. Policy Issues The legal definition of a tax, as already noted, is that it is an enforced contribution by the public or section thereof, introduced by legislative decree, for the purposes of defraying public expenses. Judicially, a tax has been identified as a “contribution,” among other synonyms. Experts in taxation maintain that the “efficiency” test in taxation calls for devising tax levies that cause minimal reduction in or disruption of overall productivity of a society (Harris 1983: 15). It is in this perspective that the overall context of taxation in the field of international air transport should be viewed. In many instances, “taxes” imposed on international air transport have been labeled iniquitous. It is strongly claimed that a tax that is “a compulsory contribution levied upon persons, property, or business for the support of government: any assessment” is an onerous demand upon any one’s person or resources and when imposed upon international air transport justifies its definition as a verb-“to subject to a severe strain.” While it is accepted that taxation must be for a public purpose, the amount of the tax charged must be compatible with principles of commerce and should be proportionate to the cost of the
456
AIR TRANSPORT
TAX
specific facility or services used rather than the cost of overall governmental services in general. The formula must admit of the tax being directly proportionate to the cost of the service or facility used. The International Civil Aviation Organization (created in 1944 to promote the safe and orderly development of worldwide civil aviation) is a specialized agency of the United Nations responsible for civil aviation affairs. ICAO sets international standards and regulations necessary for the safety, security, efficiency, and regularity of air transport and serves as the medium for cooperation in all fields of international civil aviation among its 176 contracting States. In November 1966, the Council of this Organization adopted, inter alia, a resolution on taxes related to the sale or use of international air transport whereby the Council resolved: (a) that each Contracting State shall reduce to the fullest practicable extent and make plans to eliminate as soon as its economic conditions permit all forms of taxation on the sale or use of international transport by air, including taxes on gross receipts of operators and taxes levied directly on passengers or shippers; (b) that each Contracting State shall notify the Organization of the extent to which it currently levies taxes on the sale or use of international transport by air and of the extent to which it is prepared to take action in accordance with the principles of this Resolution, and thereafter keep the Organization informed of any subsequent changes in its position vis-a-vis the Resolution; and (c) that the information thus received shall be published and transmitted to all Contracting States (ICAO 1966: 14). On this basis, if tourism-related taxes, such as the USTTA fee, are charged on the airlines, they would ineluctably come under the heading of taxes imposed on the sale of international air transport. Although ICAO treats taxation in the field of air transport primarily as a facilitation issue (Abeyratne 1991: 106-l 17), there is nonetheless the strong pronouncement by the Organization that this form of taxation is “a relatively inequitable form of taxation and can create a considerable obstacle to further development of air transport.” In one of its Commentaries, ICAO recognizes that sales taxes on tickets purchased for international air transport, where levied, increase the cost of air travel. It is not unreasonable to argue, therefore, that the worst affected by the increased cost of air travel would be the tourist. At the recently concluded ICAO Conference on Airport and Route in November 1991, the Secretariat Facility Management (CARFM) focused attention of the conference to the fact that there are charges levied on air transport which do not cover costs of functions required by civil aviation, and resolved that States should refrain from imposing charges for services and functions that are not associated (emphasis added) with international civil aviation (ICAO 1991:38). It is very much a fact for debate whether tourism is “associated with” international civil aviation and, if this be the case, whether States should be condoned if they imposed charges for services and functions related to tourism. If indeed the answer to this problem is in the affirmative, and if the USTTA fee and other similar ones go towards the enhancement, development, or administration of tourism, then it would seem (by the
457
R. I. R. ABEYRATNE
reasoning adopted by the CARFM such a fee would be permissible.
conference)
that the imposition
of
Tourism and Air Taxation
The most important attribute of tourism is that it is inextricably linked to transport as the latter is the necessary precondition of tourism (Burkhart and Medlic 1974:3). Tourism is a matter of being elsewhere, and to be elsewhere implies transport. According to internationally adopted definitions, a tourist is a temporary visitor staying at least 24 hours in the country he visits and the purpose of his visit is leisure. Any one who visits a country for a lesser period of time is an “excursionist.* Within these parameters, however, even a visitor on business would be categorized as a tourist and would accordingly be included as a business traveler, and so are the other two “visitor” categories of holidaymakers and common interest travelers, such as “visiting friends or relatives” (VFR). It is a general feature of any traveler to travel by the cheapest route, paying the cheapest fare. Even the smallest reduction in price in travel fare would significantly increase tourist traffic in most situations. Observations on the implacable sensitivity of the tourism industry to the inherent parsimony of the tourist are many. For example, “it is safe to suggest or to conclude that when prices fluctuate, “tourists’ money is spent where it goes farthest,” which is just another way of saying that tourists are very sensitive to prices in various tourism markets. Thus, the impact of economic fluctuation, the devaluation of and the restriction of tourism importing countries on the currency, amount of money to be taken out by their nationals will be felt in the tourism exporting countries” (Safari 1973). It is logical, therefore, to consider taxation on tourism as a negative feature. The watershed event of world tourism was the United Nations Conference on International Travel and Tourism Development held in Rome in 1963, which pronounced as tourism’s fundamental attribute its “contribution to the strengthening of the economies of all countries of economic activities . . . n Its theme . . . through the diversification of economic development was later read into the creation of the World Tourism Organization whose fundamental aim includes “the promotion and development of tourism with a view to contributing to economic development . . . ” (United Nations 1971:Annex, p. 1). Actually, the thread of economic development achieved through tourism runs through the entire fabric of community development. One of the main objectives of the Organization for Economic Cooperation and Development (OECD)-one of the strongest world bodies that promote tourism-is to achieve the highest sustainable economic growth in member countries and to contribute to sound economic expansion in member as well as non-member countries in the process of their development. Therefore, the foregoing discussion leaves no room for doubt that any economic constraint brought upon tourism would defeat the objectives of the industry and can lead to its decline. A basic concern of economicsthe study of production and of the
458
AIR TRANSPORT
TAX
wide spread use of unconventional means on an alternative or reciprocal basis (Lesourne 1963) -applies to tourism, together with the aphorism that economics teaches man to employ scarce resources to produce commodities over time for the use of his community (Samuelson 1967: 5). Analogically, the scarce resources as applicable to tourism are the various means of transport that support the backbone of the tourism industry. It would undoubtedly benefit the industry therefore, if transport were not regulated. Since this is by no means realistic in today’s world, particularly in air transport, the tourism industry is compelled to use this scarce resource in the most cost-effective manner. On the one hand, the tourism industry is trying to bring down the cost of travel. A world of low air fares and low overhead charges is its ultimate dream. On the other, the airline industry is constantly looking towards increasing air fares and the civil aviation world is attempting to increase landing charges, ground handling charges, and the like. Additional charges on tourism would only succeed in unhinging this imbalance further. CONCLUSIONS 1990 began with obstacles to international travel being obviated in Europe, with the crumbling of the Berlin Wall as a main signifier. Any hopes of this euphoria being permanent or long lived were shattered with the Iraqi invasion of Kuwait in August which jacked up energy prices and dampened the spirits of the traveler. Be that as it may, World Tourism Organization (WTO) figures reflect a record 415 million international arrivals in 1990, or 2.4 ‘$J above the 405 million recorded the previous year. The value of world tourism also increased by $21 billion (from $209 billion in 1989 to $230 billion in 1990) (Britannica Data Annual 1991:226). The International Civil Aviation Organization has recorded that annual passenger traffic declined in 1991 for the first time, although there is every sign of recovery late in the year and a growth in 1992. In addition, ICAO has released statistics that reflect a worldwide passenger upturn of 3 % in October 1990 over the same month in the previous year, and a 7% upturn in November 1990 on the same basis (Aviation Week and Space 1992:32). These figures are very encouraging and show a positive trend in the expansion of tourism worldwide. As already discussed, international air transport and tourism are inextricably linked. It may even be arguable that tourism could be “associated” with civil aviation, in which case, a charge levied on tourism would be generally permissible in principle. There is a caveat, and that any levy however, that the word “charge” is emphasized should be used for the development of the activity on whose name it is made. The fact that air transport is heavily regulated adds weight to this principle and makes any charge on tourism seem justifiable. A seemingly compelling argument for the charging of fees for tourism development is that the fares charged to the passenger do not cover the full cost to society of providing the transport in question (e.g., the construction of roads and railways, the expropriation of lands, and the maintenance of year-round tourism infrastructures to balance off-peak
R. I. R. ABEYRATNE
459
periods). Another ostensibly compelling argument in favor of the imposition of the tourism fee is that which supports the State in its endeavor to curb noise pollution and congestion and costs incurred therefore, where such a charge is considered a compensation for society that is “inconvenienced.” A more lofty justification often used is the “flag discrimination” theory where in some States, foreign carriers are charged a royalty or tourism charge for bringing in visitors to a country on the basis that the national carrier is deprived the privilege of carrying those tourists to its own country. If the above arguments were to prevail, then analogically a restaurant owner could charge the patrons a special fee for beautifying the restaurant and providing conveniences therein. The restaurateur could also impose a special charge when it is an off-peak period for the restaurant. The US Department of Commerce has given the most sensible and logically reasoned response to this question by rescinding its USTTA facilitation fee. It has used the most compelling source for its conclusion - the written word-After all, does not the Chicago Convention say in its Article 15 that no fees, dues or other charges shall be imposed by any contracting State in respect of the entry into or exit from its territory of any aircraft of a contracting State or persons or property thereon? The very thought that any country could contemplate imposing a special charge on tourism, therefore, becomes a legally and morally bankrupt one. 0 0 REFERENCES Abeyratne, R. I. R. 1991 Taxation in the Field of International Air Transport: Legal Aspects. Air Law 16:106-117. Airport Support 1991a Comment. Airport Support 9:3. Aviation Daily 1992 Commerce Department Pulls Facilitation Fee Paid by Carriers. Aviation Daily (February 4):207. Aviation Week and Space Technology 1992 ICAO Confirms Traffic Decline in 1991 Amid Hopes for New Growth by Summer. Aviation Week and Space Technology (January 13):32. Batik, Jerry 1990 Aviation Fuel: A Volatile Market. IATA Review 1:11-12. Black’s Law Dictionary 1990 Black’s Law Dictionary (6th ed). Saint Paul MN: West Publishing. Britannica Data Annual 1991 Britannica Data Annual. Chicago: Encyclopedia Britannica Inc. Burkart, A. J., and Medlick, S. 1981 Tourism: Past, Present and Future. London: Heinemann. Connecticut Reporter 1941 Connecticut Reporter. St. Paul MN: West Publishing. Gallacher, Jacqueline 1992 Taxing Times. Airline Business Uanuary):28-30. Gorecki. H. 1. 1958 international Airline Taxes and Charges. Interavia 10:1031. 1991 Outlook Gloomv at IATA if Airline Taxes Continue to Rise. Interavia Air Letter (16 January):2. Harris, Edwin C. 1983 Canadian Income Tax. Stoneham MA: Butterworths.
460
AIR
TRANSPORT
TAX
Hinshaw, Hainer 1939 The Protection of Aviation from Inequitable Taxation. Journal of Air Law 9: 75-94. IATA 1989 IATA List of Ticket and Airport Taxes and Fees (Vol. 1). Montreal: IATA. ICAO 1966 ICAO’s Policies on Taxation in the Field of International Air Transport (ICAO Dot 8632-C/968). Montreal: International Civil Aviation Organization. 1980 The Chicago Convention (ICAO Dot 7300/6, 6th ed.), Montreal: Intemational Civil Aviation Organization. 1991 Conference on Airport and Route Facility Management (ICAO Dot 9579CARFM 1991). Montreal: International Civil Aviation Organization. v Interavia Air Letter ’ 1991 Interavia Air Letter. Coulsdon UK: Sentinel House. Jafari, Jafar 1973 Role of Tourism on Socio-Economic Transformation of Developing Countries, M.S. Thesis, Cornell University, USA. Lesoume, Jacques 1963 Economic Analysis and Industrial Management. Englewood Cliffs NJ: Prentice-Hall. Lupton, G. W. 1935 Civil Aviation Law. Chicago: Callaghan. Samuelson, Paul A. 1989 Economics. New York: McGraw-Hill. Southern Reporter 1956 Southern Reporter. St. Paul MN: West Publishing. United Nations 1971 United Nations Economic and Social Council (15th Session), Agenda Item 12(b), Dot E/4955:24/2/71. New York: United Nations. Submitted 10 March 1992 Accepted 22 June 1992 Final version submitted 15 July Refereed anonymously Coordinating Editor: Alexander
1992 Anolik