Bern wary of proposed flight tax

French President Jacques Chirac is the driving force behind the tax Keystone Archive

France is hosting a two-day conference beginning on Tuesday to discuss its plan for a flight tax. Switzerland says it is studying the proposal.

The Swiss authorities have not ruled out support for such a tax, the proceeds of which will go to aid poor countries, but it remains to be seen how Switzerland will respond next week.

As of July 1, France will levy what it calls a solidarity tax on passengers flying out of French airports. The proceeds of the tax will go to countries in the developing world to combat Aids, tuberculosis and malaria.

France is playing a pioneering role in this domain and wants to see other industrialised countries on board as well.

At the very least, it has succeeded in mobilizing the United Nations and European Union on the issue, and managed to organise next week’s international conference in Paris.

The Swiss Agency for Development and Cooperation (SDC) will represent Switzerland at the meeting as an observer. The government has shown little interest up until now in the French initiative.

Swiss against

For instance, Switzerland did not vote in favour of a declaration at the United N ations General Assembly last September supporting in broad terms innovative financing mechanisms to support poor nations, even though several wealthy countries did, including the United States, Britain and Germany.

While specific measures such as a flight tax were not mentioned in the declaration, the new financial facilities are designed to bring governmental and non-governmental aid closer together in vital sectors.

But the Swiss are afraid of such mechanisms which could include a possible tax on international financial transactions and could reinforce the international fight against tax invasion.

And the idea of innovative mechanisms to help the poor has been the focus at a number of important international forums of late, including the World Bank.

Many countries, including Germany, Norway and Britain in particular, have expressed interest in introducing a flight tax based on the French model.

Pragmatic

Faced with these developments, the Swiss have taken a pragmatic approach. According to Remo Gautschi, who will head the Swiss delegation in Paris, the need to find new funding for development aid is “a real problem”.

The idea of a flight tax, in this context, deserves to be discussed, he added.

It could also be in the best interests of the Swiss to keep an open mind since such a tax could affect prices – in the long term – of drugs to treat Aids, tuberculosis and malaria.

At the very least talks on the price of drugs needed in poor countries and on investments needed for research and development will intensify, directly affecting Switzerland’s large pharmaceutical industry.

Switzerland understands that it cannot remain passive on this subject.

The Swiss Federal Civil Aviation Office has confirmed that it is holding talks with other departments in the Swiss administration on the possible introduction of a flight tax.

swissinfo, Michel Walter

In brief

The “solidarity tax” will be levied on all flight tickets for passengers flying out of French airports from July 1, 2006, with the exception of passengers in transit.

It will also affect the French-Swiss EuroAirport on French soil outside Basel but only for passengers flying with French airlines.

The tax is also being considered for some flights out of Geneva’s international airport, but that is being seen at the moment as legally impossible.

The tax will amount to €1 (SFr1.56) for flights within the European Union and €4 for all other flights. (Business and first class passengers will be charged €10 and €40 respectively.)