Contributions from
the Column
Monitor

No universal blueprint

Growing support for
taxing airline tickets

Avian flu lessons from Europe

“Alternative development”
often stops short

Wolrd Bank proposes active
poverty reduction

Zimbabwean success in
fighting HIV/AIDS

Nature conservation fund for
the South Caucasus

German development budget
expected to rise in 2006

DAC publishes
Annual Report 2005

Wold Food Programme buys
drought insurance for Ethiopia


04/2006 		 

[ Development funding ]

Growing support for taxing airline tickets

At a conference in Paris in late February, 11 countries including the Ivory Coast, Jordan, Luxembourg, Mauritius, Norway and Cyprus announced that they will levy a tax on airline tickets as soon as possible. Tax authorities in France will collect such a tax from as early as July 2006. Brazil and Chile are working on similar laws. Representatives from 93 countries and a multitude of non-governmental organisations were invited by French President Jacques Chirac to spend two days at the Paris symposium discussing new sources of finance for increasing international development assistance.

The money raised from airline ticket taxes would go into a new fund for urgently needed drugs, which will be established by the UN General Assembly in summer. The United Kingdom has agreed to direct some of the revenues from a ticket tax it already has in place into the new fund. The conference also set up a pilot group from 40 countries to continue the discussion on new forms of development funding. In the closing address of the conference, it was stated that the participants were “convinced that the Millennium Development Goals will not be achieved without substantial and sustainable additional long-term resources”.

Overall, non-governmental groups appeared to be satisfied with the meeting’s outcome. They noted, however, that proceeds from an airline tax are too low to close the gaps in development funding. Peter Wahl of the German Attac movement said that a tax on currency transactions (Tobin tax) was necessary: “That’s where the money is; that’s where you have to get it from.” Wahl rejected the argument raised by some politicians and the airline industry that taxing air fares would damage the economy. France wants to charge one Euro for flights within Europe and four Euros for long-distance flights in economy class. According to Wahl, even no-frills airlines can cope with such sums without complaint.

Discussing the ticket tax, Germany’s Finance Minister Peer SteinbrŸck, expressed his scepticism in a newspaper interview before the Paris conference, saying there would be no hasty action. His predecessor and fellow social-democrat, Hans Eichel, had been in favour of this kind of levy. Development Minister Heidemarie Wieczorek-Zeul, a member of the same party, similarly backs the airline tax idea. In Paris, she thanked the countries that had decided in favour of it: “They have finally opened the door to global levies for funding global tasks.”

(ell)