Tax Increase To Fund Overseas Developmental Aid?

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    The next time you buy a plane ticket in Japan, you might discover a new price increase:

    A parliamentarian league will propose a new tax on cross-border transactions and economic activities, including airline ticket purchases and currency exchange transactions, to provide revenue for development assistance to poor countries.

    The group plans to present a proposal for the new levy ahead of the Group of Eight summit at Lake Toyako in Hokkaido in July.

    However, a Finance Ministry official expressed caution, saying that “introducing a new tax will require a certain level of consensus among the public.”

    The parliamentary group, headed by Yuji Tsushima, chairman of the Liberal Democratic Party’s research commission on the tax system, was formed in late February. About 50 lawmakers, including tax experts from both the ruling and opposition parties, are members.

    For the time being, the parliamentarian group will try to join an international organization with more than 50 member countries that back such “solidarity levies.”

    Currently, 28 countries have expressed their intentions to introduce the tax. Eight nations, including France, South Korea and Chile, have already introduced an international solidarity levy on airline tickets. Those levies are directed to international organizations assisting Africa.

    Spending decreases caused Japan to drop to fifth place in the ranking of top developmental aid donor countries in 2007, its lowest position since 1972.

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