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EU Debates Tax on Airline Tickets to Fund Development Aid

The European Union is debating a tax on airline tickets to help pay for additional development aid for poor countries. Some EU nations question the merits of the plan at a time when airlines are already suffering economically.

European officials say a number of proposals are being circulated. Under one, a tax on tickets would be voluntary for member nations, airlines and travelers. People buying a ticket would be asked if they want to contribute a small amount to development aid. Officials gave no specific amount for the tax.

Brian Cowen
The idea is part of efforts to achieve a United Nations target of raising development aid to seven-tenths of one-per cent of gross national income over the next 10 years. Irish Finance Minister Brian Cowen, says it is more of a humanitarian issue than a tax matter.

"I don't think what you're going to see is an EU-wide mandatory tax proposal," Mr. Cowen said. "I think what colleagues are trying to achieve is to bring forward some ideas, some proposals that would allow people in Europe, and indeed elsewhere, to continue to demonstrate their solidarity with the developing world. We've seen the reaction of civil society to the Tsunami. I think its a question of how does one capitalize on that surge of solidarity that people feel a tragedy that has happened."

But Austrian Finance Minister Karl-Heinz Grasser said his country will not take part. He argued that EU ministers are not united on an airline ticket tax, or a possible tax on jet fuel, which also came up. He said this would be just another tax on already overburdened consumers.

The EU's executive Commission will make its own proposal on the matter by early June, in time for consideration by another meeting of the finance ministers.