EU to ‘scale back’ financial transactions tax
According to Reuters, the introduction of the tax is expected to be rolled out at a much slower pace than initially proposed and the levy may be reduced. Derivatives may be excluded from the tax altogether.
Originally the FTT was expected to impose a 0.1% tax rate on stock or bond trades, while a financial derivatives contract would have received a charge of 0.01% for every transaction.
The ‘sweeping revisions’ to the tax came after banks and investment companies lobbied furiously against a scheme aimed at making them contribute to the costs of the financial crisis.
The revised proposals are expected to raise only a 10th of the annual €35bn the EU had hoped, Reuters said.
The FTT has faced serious serious criticism from both international and European institutions, which have said the tax would destroy Europe’s fragile economies and banking sectors.
It has been called ‘fatally flawed’ with advisers saying it would likely hit the pensions and investments of millions of hard-working people, and ‘would not exclusively target high earners from the financial services industry’.
Last month, Britain launched legal proceedings against the FTT which had been agreed by 11 EU member states earlier in the year.