“B”: carriers are afraid of the increased cost of tickets with the growth of VAT on flights through Moscow

ECONOMY

MOSCOW, July 30. /Basereporter.com/. Russian Association of air transport operators (aato) evaluated the growth of the tax burden of 20 billion rubles for the industry in the case of the zero VAT for domestic flights by Moscow and a corresponding increase in the tax on flights through the capital from 10% to 20%. According to experts, it can lead to the fact that prices across the Board could rise by 8-10%, on Monday the newspaper “Kommersant”.

According to the air transport operators Association, benefits for the regional flights will cost 17 billion rubles, while the increase in VAT to flights through Moscow will bring 37 billion. Thus, the increase in the tax burden can lead to the fact that carriers will raise tariffs across the Board 8-10%.

According to the publication, a return to a tax rate of 20% for domestic flights, which are operated via Moscow, is discussed in connection with the proposal of the Chairman of the Board of Directors of the “Renova” Viktor Vekselberg to establish a reduced VAT rate for domestic flights beyond Moscow. In particular, the Federal Antimonopoly service offers to reset the tax by the end of 2020.

In addition, aato believe that for flights through Moscow are some of the options: reset rate, to preserve a preferential 10% or increase up to 20%. According to sources the newspaper, the last scenario, Finance Minister Anton Siluanov has proposed to the Prime Minister Dmitry Medvedev.

“For the development of a healthy commercial airline operations it would be advisable to keep the VAT rate at 10% for the Russian flights through Moscow, and reset for minaudi MAU [the Moscow aviation hub]”,- leads edition of the words of the President of Association Vladimir Tazuna. At the same time, the Ministry of transport, the newspaper reported that “continue to advocate a consistent reduction in VAT for domestic flights, including routes outside the UIA.”

Benefits for carriers

Earlier on Saturday the Federation Council approved a law providing for the increase of value added tax (VAT) from 18% to 20%. The text also includes amendments to extend for 6 years – until January 1, 2025 – action of the zero rate of VAT on passenger traffic to the Crimea and back. The current preferential rate applicable up to the end of 2018.

A zero-rate of VAT is established in respect of services on domestic air transportations of passengers and Luggage provided that the point of departure or point of arrival situated in the territory of the far Eastern Federal district – this preferential rate will apply until 1 January 2025.

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