Japan plans to cut aviation fuel tax by 80% at most: report

The airlines already got huge support from government. Then what ? Let JAL go bankrupt and a commercially viable ANA remain for after the pandemic.

more importantly, if all these efforts are possible for basically 2 airlines, as they owe most of the LCC’s in Japan too, what about temporarily dropping the consumer tax ? Or is that to logical and the big sharks a la Dentsu. can not profit from such a rule ? This would help the financially struggling people most but who cares . Certainly not the Japan government

Sigh. Under the current circumstances do you have a better idea? Many tens of thousands of airline workers are on furlough earning nothing. It is a temporary measure. If not this, then what?

They are on furlough because they are not flying and how will it greatly help the airlines if their planes

are not in the air, if they are grounded they don't need fuel. It's like saying taxes on gas have been reduced yet our cars are packed and we are unable to use them, well it is invincible money that goes to nobody and benefits nobody.

That will help Japan's pledge to go carbon neutral by 2050 won't it!

Japan's efforts are pitiful.

How about our consumption tax going to zero?

The airlines have had enough bailouts!!!

Some people seem to think that a tax on fuel will encourage using less. How do you suppose they do that? Taxes have 0 effect on fuel usage. Airlines will use as little fuel as possible to lower operational costs and a tax break won't change that. Airplanes don't go on joyrides or drag race just because fuel is cheaper.

That will help Japan's pledge to go carbon neutral by 2050 won't it!

Japan's efforts are pitiful.

Sigh. Under the current circumstances do you have a better idea? Many tens of thousands of airline workers are on furlough earning nothing. It is a temporary measure. If not this, then what?

Japan plans to temporarily cut its aviation fuel tax by 80% at most to help the airline industry, which is struggling with the impact of the coronavirus pandemic, the Kyodo news agency reported on Tuesday.

Running directly counter to the previous announcement of extra budgets for companies for carbon reduction measures!

Airlines have already received gross amounts of stimulus money and GoTo subsidy. Of course it is all gravy for politicians and CEOs on the publics' dime.

How about slashing "residence" taxes by 80% for people who are struggling to even pay rent?

I'm pleasantly surprised they pay any tax on fuel to begin with. I don't think airlines in Europe do. The Japanese airlines will get cash back by the bucketload from the taxpayer, but even so, a tax on fuel should still have its intended benefit, encouraging them to use less of it.

the nation needs to secure funds 

Just borrow it, like the 60+ trillion yen (I've lost count) that is talked about for extra budgets this year. Just borrow more forever and ever, right.

Why do they start worrying about securing funds all of a sudden.

What about foreign airlines ? Can they benefit from that tax break ?

It may attract some tourists if airlines are open. If they are not, go to hell ;)

@Desert

"Governments sell bonds to finance debt spending.."

The BOJ has purchased nearly half of all the govt bonds and could continue to buy a lot more if it wanted. How does this "finance" anything, let alone the government's debt spending?

Tax on aviation fuel would make a small change, as indicated by research into it. Not a very large one, they're very efficient to start with, but every change counts in the fight against climate change. Bigger changes, like everyone going vegetarian or not flying at all, may be more effective but are never going to happen.

Just borrow more forever and ever, right.

Well, the Japanese govt and central bank are the ones who issue yen, so they don't have to "borrow" any of it.

Well, the Japanese govt and central bank are the ones who issue yen, so they don't have to "borrow" any of it.

That is not how it works. Governments sell bonds to finance debt spending.

But since we are on the subject it is commercial banks that print money out of thin air. How? Banks have a reserve requirement. That means they have to have a certain percentage of their total outstanding loan portfolio on deposit in cash in their nation's central bank to cover loans. When you borrow money from a bank in the US for example, that bank only has to have 4 cents on deposit with its regional Federal Reserve branch for every dollar lent. The remaining 96 cents of that dollar lent is money out of thin air. The bank loans you a buck and you see a $1.00 deposit in your checking account. But the only has to actually have 4 cents of that buck it lent you on hand. The remaining 96 cents is newly created money. This is how a nation's money supply grows. If, at the end of the day, the bank doesn't have enough cash on hand with the regional Fed to cover its loans, it can borrow money over night from the Fed at a low interest rate called the "Discount Rate". If the Discount Rate is low, banks lend more knowing the can borrow any missing reserves cheaply. If the Fed wants to reign in lending and slow the growth of the money supply, say to limit inflation, it raises the Discount Rate. Banks curtail lending so they don't risk lending more than they have reserves to cover and thus avoid having to borrow from the Fed at the higher Discount Rate. But it is truly commercial banks that print money out of thin air. Governments have to sell bonds and pay them back eventually with interest.