‘Fatally flawed’ EU tax will hit millions of consumers
According to the chief executive of financial advisory firm deVere Group, Nigel Green, the EU’s controversial FTT is fatally flawed – and “would not exclusively target high earners from the financial services industry”.
As it stands, the FTT is expected to impose a 0.1% tax rate on stock or bond trades, while a financial derivatives contract would receive a charge of 0.01% for every transaction.
Green says that the European Commission should not forge ahead with the tax due to the “negative economic impact” of deterring financial transactions that bring benefits to the wider economy.
Green said: “It’s delusional to believe, as some proponents are suggesting, that the Financial Transactions Tax would only affect so-called City fat cats. The levy would also hit those with a pension, life assurance, insurance, a mortgage, or those exchanging cash for their holidays – so the vast majority of people – because in all likelihood the cost of the new tax will be passed on to end consumers.
“It is widely assumed that pensions will be dealt the biggest blow due to the lower returns they would face from the tax of transactions made by pension funds throughout Europe.
“This fatally flawed, Brussels-led levy would not only hit the pensions and investments of millions of hard working people, it would damage the UK’s financial services industry which is vital to sustainable economic growth.”
A month ago Britain launched legal proceedings against the Financial Transactions Tax that was agreed by 11 EU member states earlier in the year.
Green also added that the FTT will most likely provide international competitors a significant competitive edge compared to EU businesses.