28 September 2011

Commissioner Šemeta: The European Union should take the lead on the FTT project for the benefit of all

During the press conference, Algirdas Šemeta (Commissioner for Taxation, Customs, Anti-fraud and Audit) stressed that the financial sector has recently taken excessive risks and it does not create anymore added value for the real economy.  Member States have bailed out key players in the financial sector which puts unprecedented pressure on them. Furthermore, bonuses and profits are at the same levels as before the crisis hit.

Commissioner Šemeta also said that acting at EU level will avoid having a fragmented EU market. The FTT is a low tax which will ensure that the cost of the tax will remain low and SMEs will not be captured by this tax. The EU wants to promote the FTT at global level. Moreover, the EU should take the lead on the FTT for the benefit of all.

Interestingly, during the Q&A session, a journalist asked about how the EC proposal could prevent banks from transferring the cost of the tax to the end-user. Commissioner Šemeta said that the possibility of banks passing through the tax to end-users is very low because there is strong competition in the financial services sector.

When being asked about the Commission’s impact assessment and the possibility  that the FTT could lead to 90 per cent of the derivatives trade moving outside Europe, Šemeta said that the results of the impact assessment are considered in the EC proposal and that the impact on the GDP will be very low.

Concerning the allocation of the tax revenue, Šemeta said that it will be defined later on. The tax revenue will be divided between the EU budget and Member States in the right proportion.

Speech

© European Commission