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IATA urges rejection of French proposal for aviation tax

Written by: Staff
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Geneva, Mar 2 (UNI) The International Air Transport Association (IATA) has urged governments to reject French president Chirac's proposal for a global tax on aviation to fund development.

''Airlines make a massive contribution to development by bringing tourists to destinations and transporting goods to markets. Making air transport more expensive is akin to biting the very hand that feeds development,'' said its director general and CEO Giovanni Bisignani.

He was responding to Mr Chirac's speech at the opening session of a ministerial conference on innovative taxation to fund development.

''Even those countries that this initiative is supposed to help are opposed to the tax. The African Union has declared its opposition to any taxes that would add to the cost of air transport and that would drain away the income of the sector towards other activities. They rightly recognise aviation's contribution to their economies,'' said Mr Bisignani.

In Africa, the role of air transport is especially important given the absence of effective ground transport networks. Air transport generates 470,000 jobs in Africa and contributes 11.3 billion dollars to African GDP. Africa enjoyed a 9.9 per cent growth in passenger traffic in 2005 (against a global average of just 7.6 per cent).

UN Secretary General Kofi Annan's support for the tax is particularly short-sighted and disappointing, said the IATA chief.

First, it ignores the policies of the International Civil Aviation Organisation (ICAO) -- a UN agency -- that seeks to eliminate taxes on the sale of air transport. More fundamentally, the tax proposal is at cross-purposes with the UN's millennium development goals.

Imposing further taxes on air transport limits the industry's ability to drive development, said Mr Bisignani. ''It's time to replace misguided politicking with some clear thinking. We need real solutions to very pressing issues. France could fund development with three billion euros each year -- twelve times the intended tax revenue -- simply by re-allocating a quarter of its rail subsidies.'' The French tax on passengers to finance development in poorer parts of the world will come into force in July 2006. It will range from one to 40 euros depending on distance travelled and type of ticket.

UNI SU PA GC1313

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