EU Official Calls for Strong Financial Transaction Tax

EuropeanComission

According to Reuters, the EU’s chief tax official is calling on countries within the Union to implement a strong financial transaction tax, rather than watering it down with various exemptions. The official suggests implementing the rules on a more gradual scale instead.

The EU official, Algirdas Semeta, feels that a deal for regulating financial transaction taxes could be ready to go within the first half of this year, even with countries looking for exemptions for things like interbank securities repurchase deals and pension fund transactions.

Derivatives and securitised debt, which played major roles in the financial crisis of 2008 are also being considered for exemption from the financial transaction tax, with policymakers claiming that including them could harm funding for companies, hurting the economy.

The deal is currently being worked on by 11 countries within the EU, which will serve as a means to have banks repay the money that they borrowed during the crisis.

Semeta fears that if members agree upon a financial transaction tax that is filled with too many exemptions, the transactions may begin to shift abroad.