HARARE, Dec 1 (AFP) - Zimbabwe's President Robert Mugabe on Thursday marked World AIDS Day by defending the country's proposed AIDS levy, which has provoked a public outcry since it was announced in October.

The country said it would introduce a new tax in January to be levied at three percent of individual income and company tax.

Commenting for the first time on the levy, which has been roundly condemned by Zimbabweans, Mugabe told an AIDS Day function that its purpose had been misunderstood.

"This has not been properly understood. We have a disease which is incurable which is devastating our society. We have to assist many orphans who are being left behind," Mugabe said, adding that funds raised would also help AIDS sufferers.

Zimbabwe's powerful labour movement, which last year forced the government to scrap another controversial development levy, is contemplating mass action against the new tax, arguing that Zimbabweans are among the most highly taxed people in the world.

According to projections, more than 600,000 children will have been orphaned by HIV/AIDS by next year.

Mugabe said that some European countries, which he did not name, had praised Zimbabwe's initiative to introduce the AIDS levy.

The government has faced a barrage of criticism from the public, with some suggesting that the money was probably destined for the army, which has some 11,000 troops in the Democratic Republic of Congo backing President Laurent Kabila against rebels.

AIDS is killing an estimated 1,200 people in Zimbabwe per week, and a total of more than 400,000 cases of full-blown AIDS have been reported since the outbreak in the 1980s. It is estimated that 25 percent of the country's adult population are infected with HIV.

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