The transport ministry is planning to halve the aircraft fuel tax for domestic flights to ease the burden on airlines and help enhance their global competitiveness, sources said.
The ministry plans to cut the fuel tax to ¥13,000 per kiloliter from the current ¥26,000, the sources said. The reduction would be included in its requests for tax revisions next fiscal year starting in March.
It would be the first cut in the aircraft fuel tax since the levy was introduced in 1972. The plan is aimed at alleviating the burden on carriers, notably Japan Airlines Corp., which is undergoing government-backed rehabilitation.
The transport ministry is expecting fuel tax revenues of ¥71.6 billion this fiscal year. Under the tax break, airlines would save more than ¥35 billion in the next fiscal year if the same amount of fuel is used.
Before a final decision is made, the plan is expected to be discussed at meetings of the government's Tax Commission and other occasions until the end of this year.
Transport minister Seiji Maehara has expressed his intention to review the special account for airport development financed by the fuel tax and landing fees paid by airlines.