Israelis flying abroad could soon pay more for their tickets under a new tax on departing flights that the Israel Tax Authority is recommending as part of the 2027 state budget.
The proposal, set out in a position paper by the authority’s planning and economics division, would raise about NIS 1.1 billion a year, according to Globes and Bizportal. It is still only a recommendation and has not been approved.
Under the preferred model, the tax would be charged per flight, not per passenger, based on the aircraft’s weight and the distance flown. It would range from about NIS 1,300 for a small plane on a domestic route to roughly NIS 100,000 for a large aircraft on a long-haul flight.
In practice, the authority estimates the cost per passenger would be:
- About NIS 12 on domestic flights, including to Eilat
- About NIS 58 on medium-haul flights, mainly to Europe
- About NIS 274 on long-haul flights to the United States and East Asia
That would add about 4–5% to the price of a ticket. Based on 2023 data, the authority says 86% of passengers would pay either NIS 12 or NIS 58.
The authority argues that aviation is barely taxed in Israel. International flights are exempt from VAT, and jet fuel is exempt from fuel excise, even though flights contribute to climate change, air pollution and noise. It notes that the UK, France and Germany already tax departing flights.
According to the authority’s estimates, about a quarter of the revenue would come from foreign travelers, a quarter from Israelis in the top income bracket, and a quarter from the eighth and ninth income deciles. The tax would likely be collected through the three ground-handling companies that serve all flights at Ben Gurion Airport.
The proposal comes as the Finance Ministry searches for revenue to close a large budget deficit driven by defense spending. Airlines and the tourism industry are expected to oppose it, and the cost is likely to be passed on to passengers.
