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France plans tax on international airline tickets to benefit developing countries
(September 2, 2005) France is planning to launch a tax on international airline tickets next year to help finance the global fight against poverty and live up to Millennium Challenge, President Jacques Chirac said on August 29.
While the idea is still being discussed at the international level, Chirac said France hoped to put it in place as soon as possible. The tax will go first toward fighting Aids, tuberculosis and malaria. "Without waiting, I asked the government to start the procedures necessary to put such a tax in place next year", Chirac said.
Five other countries have also anticipated they will push for an international tax on airline ticket at the United Nations summit in New York in mid September. Countries involved are Germany, Algeria, Brazil, Chile and Spain.
In the search for new ways of funding the UN goal of halving extreme poverty by 2015, French Finance Minister Thierry Breton Breton said 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 benefit from globalization and pay low tax rates, because airline passengers "are rarely among the poorest citizens," and because the practical and legal feasibility of similar plans has been proven in the UK and elsewhere.
As an example, French authorities said a tax of about $6 per passenger worldwide, with a $25 surcharge for business class, would generate about $12 billion a year. The contribution could be adjusted in poorer countries, so passengers there were not penalized. Countries could even make the contribution voluntary or obligatory.
The International Air Transport Association, which represents 265 airlines, has been deeply critical of the proposal. The association has said targeting airline tickets will hurt tourism - a main source of revenue in many developing countries.
See earlier related story: European Union may adopt a proposal to tax international airline tickets to meet development aid pledges. Three EU countries will probably adopt this voluntary proposal--most opposed or undecided. BBC News May 15, 2005