Passenger Movement Charge

Last updated

The passenger movement charge (PMC) is an Australian tax payable by passengers departing Australia on international flights or sea transport, whether or not the passenger intends to return to Australia. [1] The PMC was introduced in July 1995 (replacing the previous departure tax which commenced in October 1978) and was initially described as a charge to partially offset the cost to government of the provision of passenger facilitation at airports, principally customs, immigration and quarantine functions.

Contents

Since 2017, the PMC has been A$60 per passenger over 12 years of age, with a few limited exemptions. The PMC is a flat rate, and not a percentage of the ticket price. The same charge applies for low-price tickets, as well as for free or points tickets, and for first-class fares, and for short-distance flights and long-haul flights. The PMC is imposed in addition to airport fees and airline surcharges. The PMC is paid by airlines and recovered from passengers as part of the fare or as a special charge (e.g., in the case of free or points tickets). In 2001, when the PMC was $30, the revenue from the PMC was approximately A$226 million per annum. [2] According to a 2013 survey by the International Air Transport Association, the average cost of the PMC on the airfare was 3.5%. [3]

Overview

The PMC is levied under the Passenger Movement Charge Act 1978 and collected under the Passenger Movement Charge Collection Act 1978. It is administered by the Australian Border Force. The PMC is levied on all passengers leaving Australia by air or sea, [4] unless if the passenger is exempt. The main exemptions apply to passengers 12 years of age or younger, transit or emergency passengers, crew members, defence personnel and their spouses, among others. The PMC is typically collected by the airline or shipping company, and remitted to the collection agency, presently the Australian Border Force. The PMC also applies to so-called free or points tickets.

1978-1995

Introduced in 1978, the departure tax was initially A$10. Its initial stated aim was to recover costs associated with passenger processing at Australia's air and sea ports. In subsequent budgets, the departure tax was linked to the promotion of tourism either through marketing or through the removal of a cost barrier to travel as in 1988.

The departure tax was increased to A$20 in 1981 but then reduced to A$10 in 1988 to stimulate the tourism industry. In 1991 the rate was increased to A$20 to fund a A$20 million tourism promotion package in an attempt to counter the negative impact of the pilots' dispute of 1989. The departure tax was raised again in 1994 to A$25 to offset the additional cost of tourism promotion expenditure, specifically an additional A$80 million allocated to the development of new tourism products.

1995–present

In 1995, the name of the tax was changed to passenger movement charge. The rate has changed on several occasions, with the government in most cases giving various rationales for increases.

YearRateRationale
1995A$27To offset the cost of customs, immigration and quarantine processing at Australia's borders and the cost of issuing short-term visitor visas. [5]
1998A$30To meet the additional costs associated with the transit of people and goods for the Sydney 2000 Olympic Games. [6]
2001A$38To fund increased passenger processing costs as part of Australia’s response to the threat of the introduction of foot-and-mouth disease. [7]
2008A$47To partially fund national aviation security initiatives. [8]
2012A$55No reason provided. [9] [10]
2017A$60No reason provided.

International comparisons

Australia's departure tax is one of the highest in the world. Few jurisdictions levy taxes on departing international passengers, although some charge airport fees to cover the cost of provision of government agency services at the frontiers. In 2013 Australia was ranked 130 out of 140 countries for its relative cost of ticket taxes and airport charges in the World Economic Forum's Travel and Tourism Competitiveness Report. [11]

As of May 2013, only Fiji's Airport Departure Tax, at F$150 (approximately US$85) and the three long-haul rates of the UK's Air Passenger Duty reduced rate at £67-£94 (or approximately US$105–143) for travel in lowest class or standard rate at £134-£188 (or approximately US$210–286) are higher departure taxes than Australia's. [12]

Ghana's Airport Passenger Service Charge, at GH₵200 (approximately US$100) has been reclassified as a charge, not a tax, after the government announced in March 2013 the charge would be 100% hypothecated towards funding airport infrastructure. [13]

The New Zealand government recoiled from a plan to follow Australia in imposing a departure tax. Cabinet papers show the government planned to implement a NZ$35 border charge in its May 2013 budget, but withdrew from the plan after the country’s Economic Development Ministry found the tax would have run counter to New Zealand’s tourism promotion efforts. [14] This was particularly true of travel from Australia, the ministry's modelling found.

OECD

The PMC is the second highest departure tax among the members of the Organisation for Economic Co-operation and Development (OECD) after the United Kingdom Air Passenger Duty's long haul rates (see table). For travel of less than 3,200 km the PMC is the highest in the OECD. [15]

CountryTaxRate (short haul)Rate (long haul) [15]
Flag of the United Kingdom.svg  United Kingdom Air Passenger Duty economy classBand A (0–3220 km) reduced rate at £13 (US$20.10) for travel in lowest class or standard rate at £26 (US$40.30)Band D (>8000 km) reduced rate at £94 (US$145.50) for travel in lowest class or standard rate at £188 (US$291)
Flag of Australia (converted).svg  Australia Passenger Movement ChargeA$60 (US$47.70)A$60 (US$47.70)
Flag of Germany.svg  Germany [16] Luftverkehrsteuergesetz Band A countries €12.88 (US$13.64)Band B countries €32.62 (US$34.54);
All other countries €58.73 (US$62.19)
Flag of Austria.svg  Austria FlugabgabegesetzBand A countries €8 (US$8.80)All other countries €35 (US$38.50)
Flag of Mexico.svg  Mexico Derecho de No Inmigrante Mex$294 (US$19.30)Mex$294 (US$19.30)

IATA

The International Air Transport Association (IATA) classifies the PMC a departure tax, rather than an airport charge, because its revenue does not directly contribute to passenger processing at airports or sea ports.

In June 2013, IATA released an economic briefing showing the damage the PMC does to the Australian economy. Its analysis showed that by abolishing the A$55 charge, it would result in a 3.5% drop in average ticket price on airfares to Australia, which would result in an increase of 2.5% in international passenger traffic to Australia (based on an elasticity of demand of 0.7). [3] It estimated the additional benefit the additional visitors would contribute to the Australian economy as A$1.7 billion. This would result in a net benefit to the Australian Treasury even accounting for revenue loss.

See also

Related Research Articles

<span class="mw-page-title-main">Visa policy of Australia</span> Policy on permits required to enter Australia and its external territories

The visa policy of Australia deals with the requirements that a foreign national wishing to enter Australia must meet to obtain a visa, which is a permit to travel, to enter and remain in the country. A visa may also entitle the visa holder to other privileges, such as a right to work, study, etc. and may be subject to conditions.

<span class="mw-page-title-main">Air Passenger Duty</span> A tax on flights originating or terminating in the UK

Air Passenger Duty (APD) is an excise duty which is charged on the carriage of passengers flying from a United Kingdom or Isle of Man airport on an aircraft that has an authorised take-off weight of more than 5.7 tonnes or more than twenty seats for passengers. The duty is not payable by inbound international passengers who are booked to continue their journey within 24 hours of their scheduled time of arrival in the UK. If a passenger "stops-over" for more than 24 hours, duty is payable in full.

<span class="mw-page-title-main">Airline ticket</span> Entrance ticket used for air travel

An airline ticket is a document or electronic record, issued by an airline or a travel agency, that confirms that an individual is entitled to a seat on a flight on an aircraft. The airline ticket may be one of two types: a paper ticket, which comprises coupons or vouchers; and an electronic ticket.

Visa requirements for Canadian citizens are administrative entry restrictions by the authorities of other states placed on citizens of Canada. According to the June 2023 Henley Passport Index, holders of a Canadian passport can visit 186 countries and territories without a visa or with a visa on arrival, ranking the Canadian passport 8th in the world.

<span class="mw-page-title-main">Visa requirements for South Korean citizens</span> Administrative entry restrictions

Visa requirements for South Korean citizens are administrative entry restrictions by the authorities of other states placed on citizens of South Korea.

<span class="mw-page-title-main">Visa requirements for Lebanese citizens</span> Administrative entry restrictions

Visa requirements for citizens of the Republic of Lebanon are administrative entry restrictions by the authorities of other sovereign countries and territories placed on citizens of the Republic of Lebanon.

<span class="mw-page-title-main">Visa requirements for Malaysian citizens</span> Travel regulations abroad

Visa requirements for Malaysian citizens are administrative entry restrictions by the authorities of other states placed on citizens of Malaysia. As of December 2023, Malaysian citizens had visa-free or visa on arrival access to 181 countries and territories, ranking the Malaysian passport 11th in the world according to the Henley Passport Index, making it the 2nd highest-ranked passport in Southeast Asia after Singapore, the 4th highest-ranked in Asia and the highest-ranked passport in the developing world and among Muslim-majority countries.

<span class="mw-page-title-main">Visa requirements for Swedish citizens</span> Administrative entry restrictions

Visa requirements for Swedish citizens are administrative entry restrictions by the authorities of other states placed on citizens of Sweden. As of November 2023, Swedish citizens had visa-free, eTA or visa on arrival access to 191 countries and territories, ranking the Swedish passport 3rd in the world, according to the methodology of the Henley Passport Index.

<span class="mw-page-title-main">Visa requirements for Danish citizens</span> Administrative entry restrictions

Visa requirements for Danish citizens are administrative entry restrictions by the authorities of other states placed on citizens of the Kingdom of Denmark as a sovereign state comprising the three constituent countries: Denmark, Greenland and the Faroe Islands.

<span class="mw-page-title-main">Visa requirements for Mexican citizens</span> Administrative entry restrictions

Visa requirements for Mexican citizens are administrative entry restrictions by the authorities of other states placed on citizens of Mexico. As of May 2023, Mexican citizens had visa-free or visa on arrival access to 162 countries and territories ranking the Mexican passport 22nd in terms of travel freedom according to the Henley Passport Index.

Visa requirements for Australian passport holders are administrative entry restrictions by the authorities of other states placed on citizens of Australia entering with an Australian passport.

Visa requirements for Cameroonian citizens are administrative entry restrictions by the authorities of other states placed on citizens of Cameroon. As of 2 July 2019, Cameroonian citizens had visa-free or visa on arrival access to 46 countries and territories, ranking the Cameroonian passport 96th in terms of travel freedom according to the Henley & Partners Passport Index.

A departure tax is a fee charged by a country when a person is leaving the country.

<span class="mw-page-title-main">Visa requirements for Comorian citizens</span> Administrative entry restrictions

Visa requirements for Comorian citizens are administrative entry restrictions by the authorities of other states placed on citizens of Comoros.

The Electronic Miscellaneous Document (EMD) is an International Air Transport Association (IATA) standard for electronically documenting ancillary revenue; that is, all other sales and transactions between airlines and passengers besides electronic tickets. It is a step toward moving the airline industry to purely electronic transactions in the business-to-consumer context.

<span class="mw-page-title-main">Visa requirements for Dominican Republic citizens</span> Administrative entry restrictions

Visa requirements for Dominican Republic citizens are administrative entry restrictions by the authorities of other states placed on citizens of the Dominican Republic. Along with Cuba and Haiti, the Dominican Republic passport is considered the weakest passport in Latin America for traveling.

<span class="mw-page-title-main">Visa requirements for Cape Verdean citizens</span> Administrative entry restrictions

Visa requirements for Cape Verdean citizens are administrative entry restrictions by the authorities of other states placed on citizens of Cape Verde. As of 09 October 2023, Cape Verdean citizens had visa-free or visa on arrival access to 66 countries and territories, ranking the Cape Verdean passport 80th in terms of travel freedom according to the Henley Passport Index.

Visa requirements for Antiguan and Barbudan citizens are administrative entry restrictions imposed by the authorities of foreign states on citizens of Antigua and Barbuda. As of 20 July 2023, Antiguan and Barbudan citizens had visa-free or visa on arrival access to 150 countries and territories, ranking the Antiguan and Barbudan passport 28th in the world in terms of travel freedom according to the Henley Passport Index.

Visa requirements for Central African citizens are administrative entry restrictions by the authorities of other states placed on citizens of Central African Republic. As of 2 July 2019, Central African Republic citizens had visa-free or visa on arrival access to 49 countries and territories, ranking the Central African passport 94th in terms of travel freedom according to the Henley Passport Index.

<span class="mw-page-title-main">Visa requirements for Chadian citizens</span> Administrative entry restrictions

Visa requirements for Chad citizens are administrative entry restrictions by the authorities of other states placed on citizens of the Chad. As of 2 July 2019, Chadian citizens had visa-free or visa on arrival access to 51 countries and territories, ranking the Chadian passport 92nd in terms of travel freedom according to the Henley Passport Index.

References

  1. ↑ "Passenger movement charge (PMC)". Australian Customs and Border Protection Service. Retrieved 7 June 2013.
  2. ↑ http://www.pc.gov.au/inquiries/completed/cost-recovery/submissions/australian_customs_service_/sub029.pdf [ bare URL PDF ]
  3. 1 2 IATA Economic Briefing - The Economic Benefits Of Abolishing The Passenger Movement Charge In Australia
  4. ↑ The Australian Border Force information page on the Passenger Movement Charge
  5. ↑ Departure Tax Collection Amendment Act 1994 No. 159, 1994
  6. ↑ Bills Digest No. 223 1997-98 Passenger Movement Charge Amendment Bill 1998
  7. ↑ Passenger Movement Charge Amendment Bill 2001
  8. ↑ Passenger Movement Charge Amendment Bill 2008
  9. ↑ Passenger Movement Charge Amendment Bill 2012
  10. ↑ Passenger Movement Charge Amendment Bill in the House of Representatives - Minister of Resources, Energy and Resources statement Archived 4 May 2013 at the Wayback Machine
  11. ↑ Travel and Tourism Competitiveness Report 2013 Archived 2014-11-24 at the Wayback Machine
  12. ↑ IATA Customs, Currency and Airport Tax regulations by country
  13. ↑ Government of Ghana official website - Airport Passenger Service Charge
  14. ↑ Govt dumped departure tax plan, by Vernon Small. Stuff.co.nz 20 May 2013
  15. 1 2 The Passenger Movement Charge Explained, Tourism Taxes in Australia series. Tourism & Transport Forum Archived 1 May 2013 at the Wayback Machine
  16. ↑ "LuftVStAbsenkV 2021 Luftverkehrsteuer-Absenkungsverordnung 2021".
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.