France Leads Way in Air Tax for Poor

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By Wezi Tjaronda WINDHOEK France is to hold a ministerial conference at the end of February to broaden consensus on innovative sources of funding for the world to achieve the Millennium Development Goals. The focus of the conference, scheduled for February 28 to March 1 this year, will be on the Air Ticket Solidarity Levy (ATSL), which France proposed last year as a means of achieving the commitment by developed countries to contribute 0.7 percent of their GDP for developmental purposes. France, which will start applying this air ticket solidarity as from July 1, 2006 feels that the levy will enable the international community to meet its commitment such as access to HIV and AIDS treatment. Namibia is one of the 79 countries worldwide which supported the declaration of September 14 last year on innovative financing for development. Yesterday, the Deputy Head of Mission of the French Embassy, Yann Hwang, told representatives of non-governmental organisations and the media that France has high expectations of Namibia. “We are in progress with discussions with relevant authorities and we will be happy if Namibia becomes part of the initiative,” Hwang said. In a report of the National Planning Commission (NPC) to Cabinet last year on the 2005 Annual World Bank and International Monetary Fund meetings held in Washington, it was recommended that the Ministry of Finance, NPC, Bank of Namibia and Air Namibia meet to study the French proposal in detail and establish its benefits. “Namibia is in favour of the fund, provided that it will be a national fund so that all resources collected will be put in the national poverty eradication fund. Donors would also be requested to contribute to the fund,” the report said. It added that since Namibia could not access some facilities such as the International Development Association, it gave good grounds for donors to directly support the national poverty solidarity funds. Hwang said that with thousands of tourists visiting Namibia on an annual basis, the levy would make them contribute directly to development and thus reduce poverty in the country. He reasoned that if countries continue to rely on overseas development assistance (ODA), they would not be able to reach the 0.7 percent goal. “The tax could be the solution,” added Hwang. Apart from France, Chile announced last September that it was planning to levy a solidarity contribution of about N$12 on all international flights as from this year while Norway announced that it was considering the introduction of an air ticket solidarity contribution. The United Kingdom also agreed to allocate some of the revenue from its existing air passenger duty to health development projects – mainly buying HIV/AIDS, tuberculosis and malaria drugs. The air ticket levy will among others generate more revenue for developing countries and generate more stable and more predictable revenue in order to meet the needs of developing countries. While being implemented nationally and coordinated internationally, it would also act as an instrument for regulating globalisation that transcends the North/South divide. France has for instance set out rate caps of approximately N$7 in the economy class and N$70 for the business class for the domestic and intra-European Economic Area, and N$28 and N$280 on other flights depending on the travel class. These caps are expected to generate revenue of up to N$1.4 billion, which could be used to buy ARV treatment for 1.3 million people. The meeting in France will also provide an opportunity for countries to discuss other innovative development financing mechanisms. “This conference will allow us to work out a roadmap for monitoring innovative financing in the major multilateral forums in the months and years ahead,” Hwang said.