European Commission proposes financial transaction tax

The tax would be levied on all transactions on financial instruments between financial institutions when at least one party to the transaction is located in the EU.
The exchange of shares and bonds would be taxed at a rate of 0.1 percent and derivative contracts, at a rate of 0.01 percent.
“Today I am putting before you a very important text that if implemented may generate a revenue of above 55 billion euros per year,” said European Commission President Barroso in his 2011 State of the Union address Wednesday in Strasburg, France.
The revenues of the tax would be shared between the European Union (EU) and its member states. Part of the tax would be used as an EU own resource, as anticipated in the bloc 2014-2020 Multiannual Financial Framework (MFF). This would partly reduce national contributions.
The FTT would ensure that the financial sector makes a fair contribution at a time of fiscal consolidation. The financial sector played a role in the origins of the economic crisis and yet it is currently under-taxed by comparison to other sectors.
By proposing a financial transaction tax at EU level first, the commission intends to be in a position to promote such a tax at global level in the framework of the G20.
The commission has discussed the introduction of a financial transaction since 2009 on several occasions in the G20 (Pittsburgh and Toronto).
With the support of the current French Presidency of the G20, the introduction of a financial transaction tax at global level could be on the table at the next G20 summit in Cannes on November 3 and 4 this year.
“I am confident that our partners in the G20 will see their interest in following this path,” commented Commissioner for Taxation, Customs, Anti-fraud and Audit, Algirdas Semeta, in Strasburg on Wednesday.
As for the FTT implementation in the EU, the proposal now needs to be discussed and agreed unanimously in the European Council, following the opinion of the European Parliament.
The commission proposed that the tax should come into effect from January 1, 2014.
VietNamNet/Xinhuanet