The EU charges ahead with transaction tax proposals despite opposition from member states
"Today's announcement by the EC to push ahead with transaction tax proposals will cause severe tension with those countries opposed to the tax.
"Arguing that the measure will raise EUR57 billion per year which will be shared amongst the EU and member states, it was acknowledged that this would not happen equally. Instead resourcing proposals will be submitted for review and the revenue generated will be carved up, though it is noted that the Commission was unable to specify what percentage would be kept for its own budget.
"A blanket international tax on financial transactions will undoubtedly hit certain countries and regions harder than others and could drive investment out of Europe, threatening financial centres such as London and instead pushing business to markets outside of the EU control.
"Importantly, the proposals currently do little to stop the tax ultimately being passed on to the clients of financial institutions. Whilst the EU has claimed that competition in the market will stop this, if the industry unilaterally agreed not to bear the brunt it is ultimately those who are already taking the strain of the economic crisis that will.
"This type of blanket tax is still too complicated to implement and would require a fundamental overhaul in country-specific tax policy. Without all countries buying-in to the proposals, the EU faces a long and difficult road ahead."
Frederic Donnedieu de Vabres, Chairman of Taxand, the world's largest independent global organisation of specialist tax advisors to multinational businesses.
First published on France 24 and AFP, 28 September 2011
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