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Airline Tax Debate Moves Forward

by Ulrika Lomas, for LawAndTax-News.com, Brussels

21 February 2005

European Union Finance Ministers on Thursday called on the EC to put forward a plan for introducing an air travel tax in order to fund development revenue for third world countries.

EU member states such as France, Germany and Luxembourg have expressed their support for either a tax on airline tickets or a levy on aviation fuel (which is currently exempt from tax), as a way to raise additional development aid.

However such proposals have caused division within the 25 member EU, and at Thursday's ECOFIN meeting 10 countries, including Greece and Spain, expressed reservations regarding the plan.

Groups representing European airlines have also protested, arguing that the imposition of either tax would put them at a competitive disadvantage to their non-European counterparts.

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