The Anonymous Widower

Ten EU Nations Vote For Financial Transaction Tax

The FTT is one of those ideas, that might well come into being in the next few years. But if it does come into being it has to be universal with every country charging the tax, otherwise financial transaction will move to the areas of lowest tax.

So the decision of ten EU countries to introduce such a tax is in my view not the best idea. Read about it here on the BBC. I doubt if this proposal will work very well as two of the shrewdest countries using the Euro; Ireland and The Netherlands are not joining. Obviously, we aren’t as why should we disadvantage the City of London with respect to New York, Dubai and Tokyo?

One question that I have about the limited EU proposals is what do you get charged if your bank is head-quartered in a country, that levies an FTT. I don’t bank with a bank that is, but say if I banked with Santander, I’d be moving my account tomorrow.

On a personal note, an FTT on all transactions might possibly harm peer-to-peer lenders like Zopa, so in fact it might be a block to innovative financial developments in countries within the net of the tax.

I give a non-worldwide FTT a couple of years at most, as it will disadvantage companies in countries within the tax.

If the EU wanted to raise more tax, they could clamp down on illegal cash transfers between countries in the Euro. How do these fall within an FTT?  Many houses, too in places like France are sold in part by bank transfer and by cash to avoid the capital gains tax.

October 23, 2012 - Posted by AnonW | Finance, News | Banks, Europe, Tax, Zopa