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France starts air ticket levy for aid

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Beyond France, the proposed levy has prompted a mixed response.

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PARIS, France (Reuters) -- France's government will start taking steps to introduce a levy on airline tickets from next year to fund aid for Africa, President Jacques Chirac said on Monday.

"I have asked the government to start the necessary procedures so that such a levy is in place from next year," he said in a speech at a meeting with French ambassadors.

Chirac has been urging other world leaders to impose such a levy to finance extra aid for Africa. He said last January a tax of $1 per ticket could raise $10 billion a year to fund campaigns against diseases in Africa.

He said on Monday France, Germany, Algeria, Brazil, Chile, and Spain had decided to join forces to push the idea at a Union Nations summit in September.

The Group of Eight rich nations pledged in June to consider such a levy on airline tickets but the proposal has prompted a mixed response.

The United States said it opposed the idea but would not block the plan if others wanted to implement it. Some European countries, including Greece and Ireland, have given the idea a frosty reception during European Union discussions.

The airline industry is also opposed to such a levy.

"If the politicians are really serious about helping development, this is the wrong way to go about it," said Anthony Concil, spokesman for the Geneva-based International Air Transport Association.

"It's going to hurt the demand for air travel in general, but more importantly, it's a disincentive for people who are travelling to holiday destinations in developing nations."

Concil said people working in the tourist and service sectors industry in such countries risked being adversely impacted: "Making air travel more expensive is certainly not the way to help the third world."

Germany has backed Chirac's push but a German Finance Ministry spokesman said on Monday Berlin had no concrete plans to introduce a levy on airline tickets.

The spokesman said a number of initiatives at the international level would be discussed further.

While no further details were available of amount of money France plans to levy, sums of up to three euros per airline ticket were mooted when EU finance ministers discussed the idea in May.

Copyright 2005 Reuters. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.

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