Global Policy Forum

Aviation Taxes

Print
Picture Credit: Friends of the Earth
Picture Credit: Friends of the Earth

While airplane travel only accounts for about 3 percent of global greenhouse gas emissions, it is the fastest growing source of emissions. Ever-cheaper air fares encourage people to fly rather than taking less environmentally damaging transportation, such as trains or buses. Environmental groups and concerned NGOs have long advocated for taxes on aviation to offset its environmental damage. However, airline fuel remains exempt from taxes on international flights. To make matters worse, greenhouse gas emissions from air transport are excluded from the Kyoto Protocol.

In 2006, the French government hosted an international conference to gather support for a "solidarity contribution" on plane tickets to finance a global health fund. At the event, 13 governments agreed to introduce the tax in the near future. The Paris conference also established a "pilot group for solidarity contributions for development," supported by 38 countries. But, while these "solidarity contributions" will raise funds for development, many argue that the taxes are too low to have any impact on airplane travel.

This page provides information on aviation taxes and how they can help curb global climate change, while raising revenue for development.


 

Articles and Documents

2012|2011| 2006 | 2005 | Archived Articles

 

China Bans Airlines from Paying EU Carbon Tax (February 6, 2012)

Since January 1, 2012, all airlines landing and taking off in the European Union are required to buy certificates for the carbon dioxide they emit. Airlines that fail to comply will be fined and may even be banned from landing at European airports. While the EU celebrates the introduction of this as a success, the US, China, Russia, India and airlines around the world widely criticize the measure to curb carbon emissions. China, the levy’s most ardent opponent, went as far as prohibiting airlines to join this European levy to protect the climate. Those more sympathetic to the idea of aviation taxes generally welcome the EU’s measure, but worry that the roughly $2.6 fee per ticket is too low to have any significant impact on airplane travel. (Spiegel Online)

2011

ECCP Welcomes P-Noy's 'Open Skies' Policy (January 13, 2011)

European business interests are lobbying Philippine President Benigno Aquino to legislate an "open skies" policy which would bring down "burdensome" aviation taxes. According to the European Chamber of Commerce of the Philippines (ECCP), the current tax regime, the highest in Asia, restrains investment in the tourism sector. The ECCP claims that the Philippines are losing out in economic growth and job creation to other Asian countries, but makes no mention of how the proposed reduction serves their interests. (The Manila Bulletin)

2006

Flight Tax Funds Children's HIV Drugs (December 1, 2006)

On World AIDS Day 2006, the Guardian reports on the success of the international drug purchasing facility, UNITAID and the Clinton Foundation in negotiating discounts with two Indian pharmaceutical companies, bringing prices of anti-retroviral HIV/AIDS treatment for children down to as low as 16 cents a day. UNITAID, receiving the bulk of its funds from French taxes on airline tickets, will raise US$300 million in 2006, a number that French Foreign Minister Philippe Douste-Blazy expects will rise to almost US$1 billion by 2008.

UN's Airline Drug Tax "Getting Support" (October 10, 2006)

In September 2006, France, Brazil, Britain, Norway and Chile joined by United Nations Secretary General Kofi Annan and former US President Bill Clinton, launched the international drug purchasing facility, UNITAID. Under the UN-backed project, revenue from airline ticket taxes will fund the provision of cheaper drugs to poor countries fighting AIDS, malaria and tuberculosis. According to French Foreign Minister and President of UNITAID Philippe Douste-Blazy, "countries around the globe are rallying to the idea." 19 countries have so far agreed to levy the tax. (Reuters)

Five Nations to Tax Airfare to Raise Funds for AIDS Drugs (September 19, 2006)

With a tax on international airline tickets France, Britain, Norway, Brazil and Chile together expect to raise $300 million in 2007 to help pay for the treatment of children with AIDS, tuberculosis and malaria in poor countries. Planning to pool their buying power and join forces with the Clinton Foundation, the countries hope to negotiate volume discounts with drug companies. Some public health experts welcome the prospects for a stable source of finance for AIDS treatment, while others warn that such initiatives does not "deal with the most difficult obstacles to treatment in Africa: the extreme shortage of health workers and broken-down public health systems." (New York Times)

Global Vaccine Initiative Hits Snag (July 7, 2006)

Drug companies tend not to develop or produce vaccines for infectious diseases that poor nations need because these countries cannot afford the drugs. Despite an agreement to fund vaccines in February 2006, the G8 actively dispute the method for funding such vaccines. The US opposes an airline tax like the one adopted by France, while Germany and Japan resist making substantial financial commitments, further delaying this vaccine initiative. (Wall Street Journal)

14 Nations Will Adopt Airline Tax to Pay for AIDS Drugs (June 3, 2006)

At the UN High-Level Meeting on AIDS, governments agreed to double worldwide spending aimed to slow down the spread of AIDS. But, as rich countries have pledged less than half of an estimated US$20 billion needed for preventive education and medicines, more countries and NGOs support new sources of funding. During the UN meeting, 14 governments reaffirmed their intention to implement taxes on airline tickets to raise additional money to fight AIDS. (Los Angeles Times)

 

Innovative Sources of Finance after the Paris Conference (April 2006)

With France and Chile implementing air-ticket taxes in 2006, the Friedrich Ebert Foundation provides an overview of the Paris conference outcome. Apart from the air-ticket tax, the report also analyzes other initiatives to raise additional money for development. A group of rich countries will set up an International Finance Facility (IFF) to frontload aid for immunization. But, unlike taxes on currency trade and carbon emissions, the IFF initiative will not increase development funds in the long term, nor will it have any positive spill-over on the international financial system or the environment.

Results of the Conference "Innovative Instruments for Financing Development" (March 2, 2006)

This paper looks at the outcome of the alternative financing for development conference in Paris. The event primarily focused on airline ticket taxes to fund an International Drug Purchase Facility (IDPF). World Economy, Ecology & Development (WEED) argues that the money raised should give poor countries the chance not only to eliminate diseases but also to strengthen its infant pharmaceutical industries. Although a rising number of governments support the tax, the use of the new funds and the body that will allocate the money remain undecided.


The Airline-Ticket Solidarity Tax: Conference Report (February 28 – March 1, 2006)

This document published by the French Foreign Ministry provides an overview of the airline-ticket tax. The expected tax revenues are far less volatile than traditional development assistance flows, allowing poor countries to implement long-term solutions to reduce the spread of pandemics. In addition, the document argues that the success of the tax does not depend upon universal implementation and national governments will not have to give up any of their tax sovereignty.

Joint Motion for a Resolution (February 14, 2006)

The European Parliament passed this resolution encouraging EU member states and institutions to promote alternative funds for development. The resolution mentions the French initiative on a plane ticket tax and a conference on alternative financing in Paris at the end of February 2006. So far, 79 governments support the tax, but only a few have made concrete preparations to implement it.

NGO Statement on Innovative Development Financing (February 2006)

Ahead of the international conference on airline ticket taxes in Paris on February 28, a group of NGOs released a joint statement supporting international taxes to fund the UN Millennium Development Goals (MDG). The statement emphasizes that the airline ticket taxes should be compulsory for all travelers and additional to the official development aid (ODA) commitment of rich countries. Furthermore, the NGOs call for more international taxes such as currency transaction taxes, environmental taxes and taxes on transnational corporations' profits.

 

2005

France Begins to Tax Flights for Aid (November 30, 2005)

The French government has proposed an air aviation tax beginning in July 2006. The tax would apply to tickets purchased for national, European and intercontinental flights, and should raise about $250 million per year. These additional resources would contribute to France's pledges in halting the spread of HIV/AIDS, one of the Millennium Development Goals. Some NGOs have already criticized the proposal, questioning who will receive these additional funds, and how. (Inter Press Service)


The Development Agenda after the 2005 Millennium+5 Summit (November 2005)

This briefing paper analyzes the outcome document of the Millenniun+5 Summit, stressing the importance of financing for the Millennium Development Goals. At the Summit, governments set a timetable for increasing Official Development Assistance (ODA). This paper warns that governments may count debt relief as aid, to avoid directing more resources to poor countries. Regarding global taxes, due to opposition from the US and Japan, the document merely mentions "the value" of alternative financing such as aviation taxes. (Global Policy Forum and Friedrich Ebert Foundation)


The Lula group: Declaration on Innovative Sources of Financing for Development (September 14, 2005)

Rich countries must meet their commitments on giving 0.7% of their GDP as international aid, but there is also a need for alternative sources of development financing. This declaration issued at a meeting organized by the Brazilian President Luiz Inacio "Lula" da Silva, proposes taxes on airplane tickets. Some countries will introduce these levies as early as 2006. (Technical Group on Innovative Financing Mechanisms) Signatories to the Declaration.

EU Aid Proposals Prepare for Take-Off (September 7, 2005)

According to a European Union study, the introduction of an airline tax as a source of aid for development could raise between $707.8 million and $3.443 billion. The proposal, which is still being discussed, has already met strong opposition from the aviation industry that fears profit losses. Needless to say, if countries would meet their commitments, such as allocating 0.7% of gross national income to development, "we may not need to look at a levy on airline tickets." (Inter Press Service)

A Possible Contribution Based on Airline Tickets as a New Source of Financing Development (September 1, 2005)

This working paper from the European Commission analyzes two different approaches to aviation taxes to finance development. Depending on whether governments make the tax mandatory or voluntary for passengers, the OECD Development Aid Committee could regard the revenues as official development assistance (ODA), allowing governments to escape responsibility to direct a larger part of national income to ODA. The report also stresses the importance of coordination among European members to express solidarity with developing countries.

Nations Call for Tax to Help Fight Poverty (June 28, 2005)

With a long way to go to meet the Millennium Development Goals (MDGs), a growing number of nations are turning to global taxes as a possibility to finance development. France, Germany, Brazil and Chile are calling for a tax on airline tickets to finance the global fight against poverty. A tax of $6 per passenger, with a $24 surcharge for business class, "would generate about $12 billion a year," which is about a quarter of the estimated annual funding shortfall for meeting the MDGs. (Associated Press)

An Analysis of a Possible Contribution Based on Airline Tickets as a New Source of Financing Development (June 15, 2005)

This European Commission working paper discusses the use of aviation taxes to raise additional funds for global development. The paper considers the feasibility of a mandatory passenger contribution "high," and finds that introducing a €1 tax on intra-EU flights and a €2 tax on international flights per passenger could raise as much as €568 million annually.

Berlin Declaration by Algeria, Brazil, Chile, France, Germany, and Spain (June 2, 2005)

This declaration identifies the need for increased funding to "finance the fight against hunger and poverty." These countries have committed to a "solidarity contribution" by levying a tax on air tickets. Passengers departing from participating countries would have to pay a nominal tax, which would go to fund sustainable development in poor countries. The group now seeks further membership to create a "critical mass" of countries.

A Solidarity Contribution on Airplane Tickets – Some Q & As (June 2005)

Many countries will not meet the Millennium Development Goals on halving hunger and poverty by 2015. Rich countries give far too little in development assistance and often use aid funds to support their own geopolitical and economic goals. A tax on airline tickets can raise more money for development. This document from the French government provides detailed answers regarding who will pay the tax, where and how.

 

Archived Articles

 

 

FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C ß 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.