Revisiting ‘Transaction Tax’ Adds Risk at a Fragile Time
"The reopening of the G20 debate on monetary reform and the concept of an international financial tax on transactions, seeking to raise $100m, following comments in the media attributed to French President, Nicolas Sarkozy yesterday, marks a dangerous watershed for multinationals.
"The proposals for such a tax, which have been previously discussed by the G20, are, in part, a knee-jerk reaction to funding difficulties currently faced by the EU. However the proposed 'raid' on jurisdictions with a series of blanket taxes looks ill-thought out and compromises the bespoke tax systems that have been developed in individual countries.
"Germany and the UK have previously opposed the idea of a 'Tobin Tax' arguing that tax issues are for individual member states to determine.
"A blanket international tax on financial transactions will undoubtedly hit certain countries and regions harder than others, impeding their recovery from a torturous few years of economic downturn. Particular business sectors, such as logistics and financial services, would also be much worse affected than others, and a number of other sectors remain in a fragile state and any potential for growth would be greatly impeded.
"At a time when many countries are still in debt, the revisiting of the idea of imposing an international financial transaction tax is likely to be rejected by many governments and corporations alike."
Frederic Donnedieu de Vabres, Chairman of Taxand
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