A financial transaction tax will generate considerable revenues for growth-friendly investment and development, EC tax commissioner Algirdas Šemeta said as EU finance ministers authorised 11 member states – Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia – to proceed with the introduction of an FTT through ‘enhanced cooperation’.
The UK abstained in last week’s vote. The CBI warned that the tax would be ‘damaging for jobs and growth’.
The EC will make a formal proposal within the next few weeks, ‘defining the substance’ of the enhanced cooperation, which allows a limited number of member states to proceed with a particular measure. Enhanced cooperation has not been used previously in relation to tax.
The decision paves the way for ‘a tax that could cream billions of revenues from trades taking place in London’, the Financial Times reported. The Guardian, however, noted that the UK ‘could benefit from a shift in banking business if Germany and France tax foreign exchange or derivatives trading in Frankfurt and Paris’.
Šemeta said the move was a ‘milestone’ in global tax history. ‘A block representing around two thirds of EU GDP will implement this fair tax together, answering the long-time calls of their citizens. And in doing so, they can pave the way for others to do the same. It should be remembered that, under enhanced cooperation, other member states can sign up at any time,’ he said.
There was everything to gain, he added, from being part of an EU approach to the FTT: ‘The considerable new revenues it will generate can be used for growth-friendly investment, and to support wider policy commitments such as development. Taxation will become fairer, as the financial sector makes a proper contribution to public finances and the costs of the crisis.’
But Matthew Fell, CBI director for competitive markets, said: ‘The UK government is right to reject an FTT as damaging for jobs and growth. It is disappointing that Eurozone economies are pursuing the FTT, whose costs ultimately fall on consumers and businesses, and will be a drag on the Eurozone recovery.
‘This tax must not impinge on non-participating member states by including extra-territorial reach into financial services activity conducted in the UK. As the UK’s largest single trading partner, a healthy European economy is in everyone’s interests so we urge participating member states to reconsider this tax.’
UK financial secretary Greg Clark said in a written ministerial statement: ‘The UK fully supports those member states who have raised concerns that the EC has not provided any analysis of the impacts an enhanced co-operation FTT would have on individual member states, both participants and non-participants.’
A financial transaction tax will generate considerable revenues for growth-friendly investment and development, EC tax commissioner Algirdas Šemeta said as EU finance ministers authorised 11 member states – Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia – to proceed with the introduction of an FTT through ‘enhanced cooperation’.
The UK abstained in last week’s vote. The CBI warned that the tax would be ‘damaging for jobs and growth’.
The EC will make a formal proposal within the next few weeks, ‘defining the substance’ of the enhanced cooperation, which allows a limited number of member states to proceed with a particular measure. Enhanced cooperation has not been used previously in relation to tax.
The decision paves the way for ‘a tax that could cream billions of revenues from trades taking place in London’, the Financial Times reported. The Guardian, however, noted that the UK ‘could benefit from a shift in banking business if Germany and France tax foreign exchange or derivatives trading in Frankfurt and Paris’.
Šemeta said the move was a ‘milestone’ in global tax history. ‘A block representing around two thirds of EU GDP will implement this fair tax together, answering the long-time calls of their citizens. And in doing so, they can pave the way for others to do the same. It should be remembered that, under enhanced cooperation, other member states can sign up at any time,’ he said.
There was everything to gain, he added, from being part of an EU approach to the FTT: ‘The considerable new revenues it will generate can be used for growth-friendly investment, and to support wider policy commitments such as development. Taxation will become fairer, as the financial sector makes a proper contribution to public finances and the costs of the crisis.’
But Matthew Fell, CBI director for competitive markets, said: ‘The UK government is right to reject an FTT as damaging for jobs and growth. It is disappointing that Eurozone economies are pursuing the FTT, whose costs ultimately fall on consumers and businesses, and will be a drag on the Eurozone recovery.
‘This tax must not impinge on non-participating member states by including extra-territorial reach into financial services activity conducted in the UK. As the UK’s largest single trading partner, a healthy European economy is in everyone’s interests so we urge participating member states to reconsider this tax.’
UK financial secretary Greg Clark said in a written ministerial statement: ‘The UK fully supports those member states who have raised concerns that the EC has not provided any analysis of the impacts an enhanced co-operation FTT would have on individual member states, both participants and non-participants.’
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