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Financial Transaction Tax will Impact the Global Economy

Financial Transaction Tax will Impact the Global Economy
18 Feb 2013
"The European Commission's plans for the financial transaction tax unveiled today are being met with outrage by some member states and countries around the world who oppose the tax.

"The plan has been devised to ensure that businesses can do little to avoid paying the levy. It includes numerous caveats to cover the transaction type, where it's issued and traded, and some may believe the plan was designed to alienate certain types of trade altogether.

"Businesses face the potential for double taxation and with stringent anti-avoidance measures included in the plan; their freedom to operate outside of the tax has been effectively eradicated.

"The extended remit of the tax is alleged to generate EUR30-35bn. However, France reportedly yielded significantly less revenues from its version of the tax in 2012 than initially predicted, with only EUR200m collected instead of the anticipated EUR530m. This brings into question whether the tax has been overhyped in terms of revenue generation.

Frederic Donnedieu de Vabres, Chairman of Taxand, the world's largest independent global organisation of specialist tax advisors to multinational businesses.

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Taxand's Take

"The larger question is the impact the tax will have on country relationships and the wider global economy, with the EU wide impact assessment concluding it will hit long-term growth and cost jobs. The FTT appears to be a half-baked plan which has taken little notice of the wider waves of negative impact it will have."

Taxand's Take Author