Tuesday, August 30, 2005

[MDGs] France plans poverty tax on air travel

August 30, 2005 - 11:48AM

France plans a tax on airline tickets next year to finance the global struggle against poverty and diseases that are ravaging the developing world, including AIDS, President Jacques Chirac announced.

While the idea is still being debated at the international level, France wants to launch a pilot program to prove it could work. The first funds would go first toward fighting AIDS, tuberculosis and malaria, Chirac said Monday.

"Without waiting, I asked the government to start the procedures necessary to put such a levy in place next year," Chirac told French ambassadors gathered in Paris. Officials will now study the judicial ramifications and how exactly the project would work.

The measure must pass parliament, Finance Ministry spokesman Sylvain Lambert said. Chirac's party has a strong parliamentary majority. Beyond initial funding for health care, Chirac said some money could eventually be directed toward Britain's proposed International Finance Facility - which would leverage billions of dollars a year for aid to Africa by issuing bonds on the world's capital markets.

France, Germany, Spain, Algeria, Brazil and Chile will push for an international levy on airline tickets at a UN summit in New York in mid-September, Chirac said. The reasoning behind the "solidarity levy" was presented by French Finance Minister Thierry Breton at a two-day UN ministerial meeting in June.

In the search for new ways to fund the UN goal of halving extreme poverty by 2015, Breton said then that an airline tax was "one of the most promising solutions for the developing countries and for the international aid architecture." He said airline tickets were chosen because airlines benefited from globalisation and paid low tax rates, because airline passengers were "rarely among the poorest citizens" and because the practical and legal feasibility of similar levies had been proven in Britain and elsewhere.

As an example, French authorities have said that a tax of about five euro ($A8) per passenger worldwide, with a 20 euro ($A33) surcharge for business class, would generate about 10 billion euro ($A16.3 billion) a year. The contribution could be adjusted in poorer countries, so passengers there were not penalised. Countries could even make the contribution voluntary or obligatory.