Chirac Proposes 'Tobin Tax' On Global Shipping

by Ulrika Lomas, Tax-News.com, Brussels

19 November 2008

Former French President Jacques Chirac has strongly urged the international community to impose a new international tax on shipping, in a bid to generate long-term resources, designed to finance drinking water projects in developing countries.

During a 'Water for Peace, Peace for Water' conference, held jointly in Paris by the Chirac Foundation, the United Nations Educational, Scientific and Cultural Organisation and the French Development Agency, the former President emphasised that the much-needed initiative would fund development projects specifically aimed at providing access to drinking water and establishing water purification schemes.

Under the proposals, the international tax would be levied on the busiest and, consequently, most polluted maritime routes.

In his speech, Chirac also denounced the perceived dwindling of development aid currently offered by wealthy developed countries, although he admitted that this stemmed from the economic crisis. However, he proposed that, in addition to the shipping tax, the target of donating 0.7% of Gross Domestic Product should be maintained.

Chirac was behind the establishment of another such initiative in 2006 - a solidarity tax imposed on aeroplane tickets. Despite a predicted revenue of EUR205m for 2007, however, the measure generated only EUR160m.

Chirac has long been an advocate of such 'Tobin taxes' (named after the economist James Tobin who suggested a tax on all international currency transactions in the 1970s to reduce speculation). In the past, he has proposed global taxes on financial transactions, and even on banking secrecy, to generate revenues to fight third-world poverty. However, his ideas have failed to garner much support among the governments of the wealthier nations.

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