Airlines attack South Korea's departure tax plan

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Airline groups have lashed out at South Korea over a plan to introduce a tax on international airfares to fund programmes in developing countries.

Korea's government recently proposed a 1,000 won ($1.05) tax on airfares for departing passengers, saying funds collected would be used to help reduce poverty and disease in developing countries. Several other countries, such as France, Brazil and Norway, have announced similar airfare tax plans in recent months.

The Association of Asia Pacific Airlines (AAPA) has been unusually vocal in publicly criticising the Korean government, and its complaints are being echoed by IATA. AAPA director general Andrew Herdman says the proposal is "another example of what seems to be a rash of unwelcome and misguided new taxes targeting air travel, too often aimed at funding politicians' pet projects or simply serving as international political gestures".

He adds: "It's easy to appear generous when spending other people's money and not being held accountable for the results. The costs of collection and administration of such taxes, foisted on the industry, are likely to offset most, if not all, the intended benefits.

"The deeper absurdity of such initiatives, particularly those focusing on unspecified foreign aid projects, is that no industry does more than aviation to promote global development, making both rich and poor countries better off. Travel and tourism, and air transport in general, create millions of jobs worldwide. Over-taxing aviation is counter-productive to the wider goals of promoting economic and social development, and alleviating poverty."

The AAPA represents 17 major airlines in the Asia-Pacific, including South Korea's Asiana Airlines and Korean Air. Both carriers are also members of IATA, which has joined the AAPA in publicly criticising the Korean tax proposal.

IATA says such a tax "will discourage passenger traffic and inhibit the unparalleled economic contribution made by the air transport industry". ■