The National Association of Pension Funds (NAPF) has added its voice to those criticising a proposal made by the European Commission two months ago for a tax of 0.1 per cent on the value of financial transactions, known as the FTT or Tobin tax. Darren Philp, director of policy at the NAPF, said: “There’s a clear need to encourage a longer-term approach to investment, but we are concerned that this route could increase costs for pension funds at a time when many are under great strain".
Jerry Moriarty, director of policy at the Irish Association of Pension Funds, warned that investors would end up paying the tax. Peter de Proft, director general of the European Fund and Asset Management Association, warned of “perverse effects that will affect the end-investor”.
Julie Patterson, a director at the Investment Management Association, said: “The FTT would be a swingeing tax on pension funds. Even if pension funds were granted an exemption, any FTT the banks paid would still get passed down the chain and pension funds would pay it as increased brokerage fees.”
Moreover, the tax could be imposed several times on essentially the same transaction, if it involves more than one stage or more than two parties.
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