Inter Press Service - July 11, 2006
Julio Godoy

Money raised through the tax enforced Jul. 1 will go into UNITAID, the international drug purchase facility launched in June to combat AIDS, malaria, and tuberculosis.

Passengers flying from or through France now pay between one and 40 euros a ticket (a euro is 1.27 dollars) depending on destination and flight class. The solidarity tax as it is called is expected to raise 200 million dollars a year.

The tax proposed first by Brazilian President Luiz Inacio Lula da Silva and French President Jacques Chirac is due to be implemented in 14 countries (Brazil, Chile, Congo, Cyprus, Gabon, Cote d'Ivoire, France, Jordan, Luxembourg, Madagascar, Mauritius, Nicaragua, Norway and Britain).

The European Commission, the European Union executive, estimates that the tax could raise up to 10 billion dollars a year if adopted worldwide.

"Our aim is to encourage more countries to adopt the international solidarity levy on air tickets with a view to bringing in at least one billion euro," French minister for international affairs Philippe Douste Blazy told IPS.

"The advantage of this solidarity levy is that it is a small amount of money compared with the cost of air travel, and can be implemented by countries without undermining their competitiveness," he added.

Many development experts have welcomed the tax. "The idea of innovative financing for development is now an issue on the agenda of all major international forums, and the principle has gained broad support in the international community," Susan George from the Transnational Institute in Amsterdam told IPS.

The levy is based on a model developed by late Nobel laureate James Tobin to tax international currency and other speculative transactions in order to fund development.

Such taxes can be enacted domestically, but most experts agree that they will require multilateral cooperation if they are to be effectively enforced.

Since Tobin's first presentation of the idea in a seminal paper 'A proposal for international monetary reform' published in 1978, the debate has evolved into one on "innovative financing for development."

New financing is being discussed especially to meet the eight Millennium Development Goals (MDGs) such as reducing poverty and promoting health. Many of these goals have a 2015 target date.

The solidarity tax is aimed particularly at the health goal. UNITAID created under the umbrella of the governments of France, Brazil, Chile and Norway will use the money to buy drugs to combat AIDS, malaria, and tuberculosis -- the three most lethal diseases in developing countries.

AIDS is causing some three million deaths a year, including 570,000 children under the age of 15. Malaria and tuberculosis kill up to five million a year. Most victims are children and youth in developing countries, especially in sub-Saharan Africa.

Blazy said UNITAID will focus on antiretroviral therapies for treatment of AIDS and new anti-malaria drugs.

"The example of vaccines in the Global Alliance for Vaccines and Immunisation (GAVI) shows that by involving industry, an appropriate volume and quality of production can be obtained at a cost accessible to the countries in the South."

The price of treatment to combat the diseases is at the core of the challenge, activists say.

"The newest antiretroviral therapies cost now up to 13,000 dollars per year per person," a spokesperson for Act Up Paris, a French association of information on AIDS told IPS.

"UNITAID and the solidarity tax should not remain empty, marginal initiatives," he said. "We must act up to mobilise political will across Europe and North America."

Former U.S. president Bill Clinton has welcomed the creation of UNITAID as "an audacious initiative". The project is being supported by several sports stars such as Liberian and Cameroon football players Georges Weah and Samuel Etoo, and the Brazilian football legend Pele.

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