France launches air tax to fund drugs for poor

29th June 2006, Comments 0 comments

PARIS, June 29, 2006 (AFP) - A pioneering French tax on airline tickets to raise money for medicines in the developing world takes effect from Saturday, though only a handful of countries have indicated they will follow suit.

PARIS, June 29, 2006 (AFP) - A pioneering French tax on airline tickets to raise money for medicines in the developing world takes effect from Saturday, though only a handful of countries have indicated they will follow suit.

Passengers boarding aircraft in France will pay a surcharge of between EUR one and 40 (1.25 and 50 dollars) from July 1 depending on their destination, and the money raised will go to an international fund to buy treatments for AIDS, tuberculosis and malaria.

The "air-ticket solidarity levy" has been vigorously promoted by President Jacques Chirac, but the airline industry is opposed to the scheme and, of France's EU partners, only Luxembourg has said it will implement the measure.

After an international conference in Paris in March, French officials said 10 other countries had signed up to the initiative: Brazil, Chile, Cyprus, Congo, Ivory Coast, Jordan, Madagascar, Mauritius, Nicaragua and Norway.

They have since been joined by Gabon, which will also introduce a charge on Saturday, of EUR two on international flights in business and first class.

Britain says it is in principle in favour of an air-ticket levy but already has one in place that raises money for debt relief. Other rich nations such as the United States, Canada and Germany have rejected French overtures.

France hopes to raise EUR 200 million a year for an International Drug Purchase Facility, also known as Unitaid, whose function will be to bulk-buy medicines for countries — mainly in Africa — that cannot afford them.

According to the French foreign ministry, between six and eight million people die every year from the three major epidemics, many of whom could be saved if given access to treatments.

"A child dies every 30 seconds in Africa and no-one cares," said Foreign Minister Philippe Douste-Blazy, who has led an international lobbying effort to raise support for the drugs fund.

Among his successes was a deal with the International Football Federation (FIFA) under which balls bearing the Unitaid logo are exchanged by captains at the start of each match in the World Cup finals in Germany.

More than 40 countries have announced support for Unitaid, which should be operational by October once links are finalised with the World Health Organisation and other international agencies. The fund hopes to raise a billion EUR a year by 2008.

France says the airline ticket tax is a "simple, equitable, and economically neutral tool" for financing the drugs fund, and that it is appropriate to target the airline business because "it is one of the industries that benefits most from globalisation with an average annual growth of five percent."

Under a law voted through parliament last December, passengers flying out of French airports will pay one euro in economy class — and 10 in business — if their destination is in the EU. For flights outside Europe, the surcharges are four and 40 euros, depending on the class.

Passengers who make a stopover in France of less than 12 hours, or who stay longer because of delays, are exempt.

French officials say that 70 percent of tickets bought are for economy class inside Europe. "Neither air transport nor the tourist industry will be affected. A contribution of a few euros will not stop anyone taking a plane," said Douste-Blazy.

But the International Air Transport Association (IATA), which represents 265 airlines, has called on countries to abandon the ticket tax, which it says is unfair and inopportune at a time of rocketing fuel costs.

"Air companies play a vital role in the economic development of nations, enabling access to world markets for goods and people. Increasing the cost of air transport is like biting the hand that feeds development," said IATA president Giovanni Bisignani.

Copyright AFP

Subject: French News

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