ALTA: Tax increase in Argentina directly harms the population
We express our concern about the recent increase in taxes on air tickets in Argentina, since this measure significantly impacts the cost of air travel, discouraging demand at a key time for the recovery of the sector.
November 24, 2023
Panama, November 24, 2023 - The Latin American and Caribbean Air Transport Association (ALTA), an entity representing 160 companies in the air transport ecosystem, including 40 airlines responsible for more than 80% of air traffic in the region, expresses its concern about the recent tax increase on airline tickets in Argentina, as this measure significantly impacts the cost of airline tickets, discouraging demand at a key moment for the recovery of the sector.
Prior to this increase, Argentina was already facing a challenging environment compared to other countries in Latin America and the Caribbean. According to the ALTA - Amadeus Competitiveness Index 2022. While countries such as Brazil, Chile and Cuba offer more competitive rates, Argentina presents a significantly higher tax burden, with an exit tax representing 30% of the average price of a ticket in Q2 2022, 84% higher than the average in the region. Argentina is the least competitive country in terms of ticket price taxes, which total 112% of the price. This tax framework makes air travel considerably more expensive and more difficult to access for people who do not only need to travel for tourism.
International outbound tourism by air in Argentina is 18% below 2019 levels (accumulated January-September), and this new increase makes air tickets even more expensive. This situation discourages demand at a crucial time where Argentines are planning summer trips. Moreover, in the cumulative January-October, international passenger traffic is 22% below 2019 levels, showing one of the slowest recoveries in the region. In contrast, Colombia, which reduced VAT on airline tickets from 19% to 5% between 2020 and 2022, has seen an increase of 33% above its 2019 levels.
We are convinced that a review of this tax policy is essential to foster the recovery of the airline industry in Argentina and improve its competitiveness at a regional level. We are committed to collaborate with the authorities to find solutions that support the sustainable growth of aviation and tourism, benefiting both the industry and consumers. We call for a reconsideration of this measure to protect the economic and social well-being of the country and to ensure continuity in the recovery of air operations.
