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Forum for the Future of Aid

Southern Voices for Change in the International Aid System Project

The Forum on the Future of Aid is an online community dedicated to research and opinions about how the international aid system currently works and where it should go next

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The Air Ticket Levy gets praise from Stamp Out Poverty

A message from Stamp Out Poverty:

The Air Ticket Levy - the first tax specifically dedicated to fighting global poverty - has just been agreed at a meeting of Ministers in Paris and is set to start producing revenue in July. France alone will generate in the region of 200 million euro. The French Government insist that the revenue will be additional to current ODA commitments. 12 countries in total (listed below) have agreed 'to implement the international air-ticket solidarity contribution'. For Stamp Out Poverty the Air Ticket Levy (ATL) may only be producing modest funds but it is a stepping stone, setting an important precedent in respect of additional development financing initiatives.

The Guardian published a piece on Monday about this historic conference and the progress that has been made in an article showing great support for our flagship campaign for a stamp duty on currency transactions. To read the article, click here.

Below please find a short report of the 'Paris Conference on Innovative Financing for Development'.

On 28 February/ 1 March 2006, ninety-three states met in Paris for the ministerial conference on Innovative Financing for Development rallying support from the international community to go further to meet the Millennium Development Goals by 2015.

President Jacques Chirac opened the conference stating that "despite the continuous increase in global wealth, a third of humankind still lives on less than a euro a day," and that "...globalisation, far from bridging the (poverty) gap, is widening it even further". He declared the intention to implement an airline-ticket solidarity levy in France to raise more than 200 million euros annually starting 1 July 2006. France is proposing "to ear-mark the proceeds...for an International Drug Purchase Facility to combat such pandemics as HIV/AIDS, tuberculosis, and malaria, which are ravaging developing countries".

The 12 countries that have agreed to implement the international airline-ticket levy are: Brazil, Chile, Congo, Cyprus, Ivory Coast, France, Jordan, Luxembourg, Madagascar, Mauritius, Nicaragua and Norway.

The UK is conspicuous by its absence from this group. Although the UK already has an Air Passenger Duty it seems that the French and the UK Governments have not yet found a way to financially back each other’s proposals. I attach the communiqué between the two Governments released at the Ministerial. Reference to France supporting IFFIm (the pilot financing facility for immunisation) is not from ATL funds but from traditional ODA, and is an old pledge. The UK states its support for France’s International Drug Purchase Facility but doesn’t state when and by how much it will give a financial contribution.

On the second day of the conference, 4 very well-attended seminars took place on different potential instruments for innovative financing (other than the airline-ticket levy) including the International Finance Facility (IFF) and IFFIm, taxing financial transactions and reducing tax evasion, a humanitarian lottery, and facilitating and lowering remittance costs for migrant workers. Stamp Out Poverty dominated the seminar on ‘taxing financial transactions and tax evasion’ with both Sony Kapoor and Avinash Persaud speaking to an audience of more than 300 people. We widely disseminated our ‘Sterling Solution’ report, launched in November of last year (written by Avinash Persaud's think-tank ‘Intelligence Capital’), which expertly shows how a Currency Transaction Tax (CTT) can be plumbed into the financial system and how payment of a CTT cannot be avoided.

An important outcome, stated in the Chair's Summary document of the conference, is that a further ‘Forum on Innovative Financing for Development Sources’ has been scheduled for 2007.

David Hillman
Stamp Out Poverty ~ Co-ordinator


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