Under the Commission’s current plan, the tax will levy 0.1% on share transactions and 0.001% on bond transactions, when one of the parties is based in one of the 11 countries of the Financial Transaction Tax (FTT) zone.
Clarifying the jurisdiction
The banking lobby, a firm opponent of the FTT, is demanding clarification on the geographical reach of the tax. Will branches of European banks in New York or Singapore have to pay the tax? This question should be answered in October.
A study by the German Institute for Economic Research (DIW) estimated the revenue from the FTT at €36 billion across the 11 participating countries. The European Commission's own figures support this finding, but the projected revenue drops to €24 billion if bond transactions (most of which concern transfers of national debt) are excluded. But any reduction to the tax's jurisdiction would lower these predictions. [...]
A tax to calm the financial markets
Recent volatility on the world’s financial markets will only add to this political will. A very small tax on financial transactions could discourage high frequency trading.
James Henry, a consultant for the Tax Justice Network, said the current approach “amplifies any hiccups on the market", and a small tax could discourage the extremely high number of transactions that occur during panic periods. [...]
Full article on EurActiv
© EURACTIV
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article