France Repeats Call For International Development Tax

by Ulrika Lomas, Tax-News.com, Brussels

18 January 2005

The French government has once again raised the issue of an international tax to create a pool of funds which could be used to fight global poverty and provide aid and relief to disaster-stricken countries.

Writing in the French daily Les Echos, Foreign Minister Michel Barnier voiced support for proposals put forward by British Finance Minister Gordon Brown, who has called for the establishment of an International Finance Facility which would use the capital markets to double aid budgets.

However, Barnier also believes that this idea should be supported by an international levy on global business.

"France, in partnership with Brazil, Chile and Spain, proposes that this mechanism be complemented by the creation of international contributions, voluntary or compulsory, raised on the wealth generated by globalisation,” he stated.

French President Jacques Chirac has been a long-time advocate of an international tax to help fight third world poverty and fund development projects, although his enthusiasm has not in the past been matched by the leaders of other industrialised nations.

Last year, a Chirac-appointed panel of experts, including economists, business leaders, government officials and activist groups, set out to examine the possibility of placing taxes on certain international industries such as shipping or arms sales, or imposing extra carbon emissions taxes. The French leader then used that year’s G-8 summit to push his idea of an International Development Tax.

Chirac claimed that the OECD had recently begun to see the “potential” of such a levy, although he conceded that France would have to “advance progressively” in order to convince other governments of the idea’s merits.

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