French Solidarity Tax Has 22 Percent Shortfall

January 9, 2008

Last year, France enacted a “solidarity” tax on airline ticket sales originating from France, ranging from 1 euro ($1.47) for short flights up to 40 euros ($58.67) for longer international flights. The money raised, according to Daily Tax Report’s Lawrence J. Speer, goes to “a new international financing facility dedicated to funding health projects in poor countries, particularly for drugs against pandemics like AIDS, malaria, and tuberculosis.”

Whether this is the best way to fund such programs is debatable, but a big problem has emerged. The tax was expected to raise 205 million euros ($300 million) or more a year, but in 2007 only brought in 160 million euros ($235 million), a 22 percent shortfall.

So audits are on their way as politicians blame airlines for not collecting enough revenue for the tax. The French report, available here (in French), also recognized that instead of the tax sweeping the globe, only two other countries (Chile and Gabon) have adopted it.

Related Articles

A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.