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Financial Transaction Tax proposal
236. The Commission's FTT proposal is the first of its proposals for new own resources. The Commission argued that, by 2020, an FTT might provide €37 billion per annum to the EU budget (22.7 per cent of own resources). It also suggested that an FTT would create a new revenue stream that would "gradually replace national contributions to the EU budget". According to the Commission, in this way, an FTT would "give national governments extra room for manoeuvre and contribute to the general budgetary consolidation effort".
237. However, a number of witnesses have expressed concerns about the proposal. The Oxford University Centre for Business Taxation stated that it was unclear why the financial sector should be targeted, and Professor Ackrill suggested that the FTT proposal's reversal of the trend towards horizontal measures rendered it inappropriate as an EU revenue. The Government has expressed strong opposition to any new EU taxes to fund the EU budget, highlighting the issue of tax sovereignty.
238. The Committee has found the evidence of Professor Ackrill and the Oxford University Centre for Business Taxation to be convincing. It considers that the Commission has failed to make a case for an EU-wide Financial Transaction Tax. It also finds the Commission's proposal that an FTT provide funding for the EU budget unsuitable on two further grounds. First, it is likely to fall disproportionately on a minority of Member States, and especially the UK, which could account for 71 per cent of overall revenue under the Commission's proposal. Second, the Committee cannot identify any genuine link between EU policy objectives, such as those of Europe 2020, and an FTT, and so find that the proposed tax fails to be a suitable own resource on the Commission's own criteria.