EU finance ministers have edged closer on an international tax on financial transactions.
After the monthly meeting of EU finance ministers on November 7, the Italian finance minister Pietro Carlo Padoan told reporters that there had beengood progress in both the criteria and the identification of items that would be subject to the tax.
EU Observerreported that Padoan said the ministers had agreed on the scope of taxation, imposed initally on shares, later on derivatives.
The EU economic affairs commissioner Pierre Moscovici told a press conference:
Good progress is now being made towards an agreement by the end of the year, which would allow the FTT to enter into force by the beginning of 2016.
After an attempt to impose the tax across all 28 EU countries collapsed in 2012, the eleven countries agreed to work towards establishing a tax under enhanced co-operation in early 2013.
France and Germany have been the main driving forces behind the FTT but both favour limiting the number of products that are taxed. Austria favours subjecting most financial products to the tax.
The United Kingdom submitted a legal challenge to the European Court of Justice in opposition to provisions that would have requires British firms to pay the tax every time they did business with firms in the eurozone.
To avoid negative effects on the real economy, the FTT will not apply to day-to-day financial activities of citizens and businesses, investment banking activities for raising capital, transactions carried out as part of restructuring operations and refinancing transactions with central banks.
The European Commission believes that its proposal, which includes a 0.1 percent levy on bonds and shares and 0.01 percent on derivative products, would raise €30-35 billion in revenue per year across the 11 countries. The German finance minister Wolfgang Schaeuble admitted that the tax was largely symbolic and revenue generated would be ‘very modest’.