Economic benefits of reducing aviation taxes in Latin America and the Caribbean.

Abstract

IATA commissioned SEO Amsterdam Economics to prepare a study to independently quantify the economic benefits of reducing aviation taxes in Latin America and the Caribbean. The study provides evidence on the substantial economic benefits that a removal of aviation taxes and a reduction of passenger-based charges can bring to the economies of Latin America and the Caribbean for consumers and businesses. The study also shows that significant potential benefits of connectivity growth will be foregone for consumers and businesses if taxes remain at their current levels. Removing aviation taxes and reducing passenger based charges delivers immediate consumer benefits of 5.8-7.9 billion USD. By 2035, these consumer welfare benefits accumulate to 13.5-18.5 billion. In terms of macro-economic impact, removal of aviation taxes will results in a total GDP impact of 87 billion USD (+1.6%) and 912 thousand jobs (0.3% increase)