SA rejects proposed airline ticket levy

JOY ORLEK
THE INTERNATIONAL Chamber of Commerce - South Africa has added its support to concerns over a proposal to tax airline tickets to raise funds for development aid. This follows a report commissioned by French president Jacques Chirac suggesting that airline tickets be taxed to raise funds for development aid. On July 1 France will take the lead in implementing this initiative by imposing a new levy on all commercial airline tickets, ranging from one to 40 euros depending on the distance travelled and type of ticket, in the hope that other countries will follow suit. “While ICC fully acknowledges the importance of combating world poverty, it has serious concerns about creating a special purpose tax that targets airline tickets “A tax to finance development aid that exclusively targets the aviation industry and airline travellers would be arbitrary, detrimental to that particular industry, and would create serious economic distortions,” a spokesman said. “It would lead to economic inefficiencies by distorting the choice between alternative modes of transportation.” “As a member of the International Civil Aviation Organisation (ICAO), ICC SA undertakes only to levy taxes that will be directly applied to aviation-related services and activities,” said ICC SA director Pat Corbin.