France imposes €1 air ticket tax to fight Aids

FRANCE: President Jacques Chirac urged rich states yesterday to follow France's lead and impose a €1 levy on airline tickets…

FRANCE: President Jacques Chirac urged rich states yesterday to follow France's lead and impose a €1 levy on airline tickets to help poor countries buy drugs to fight Aids and other killer diseases.

Mr Chirac said the surcharge would help spread the benefits of globalisation to people living on less than one euro a day, a level of poverty that prevents those hardest hit by malaria, Aids and tuberculosis from receiving treatment.

At the start of the two-day international conference on finding new ways to fund development, Britain and France announced a joint study on funding education and health through the airline ticket levy, a decision welcomed by some aid groups.

At an opening ceremony at the Élysée, Mr Chirac, who championed the levy in the face of widespread initial scepticism and opposition from airlines, praised developing countries who were considering imposing a similar charge.

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From July 1st, a French law will levy €1 on domestic and European flights and €4 on long-haul flights. Business and first-class travellers will be charged an extra €10, rising to €40 on international flights.

Airlines already concerned about spiralling fuel costs have opposed the idea, which has also been opposed by the US and EU countries including Ireland, Italy and Greece. The French levy, expected to raise €200 million in a full year, will be held by the French development agency pending agreement on how to dole out the funds. Officials said they hoped a pioneer group of around a dozen states would sign up to the scheme by the end of the conference and work out a drugs purchasing mechanism for countries in need.

UN estimates say some $200 billion a year will be needed in official development aid by 2015 to meet the so-called millennium development goals of halving world poverty.

UN secretary general Kofi Annan told the conference the levy must be used to provide extra funds and not replace money from state budgets.

"And even if we reach the goals, there would still be a vast backlog of human deprivation, and we would need a longer-term strategy for financing the complete eradication of poverty."