On 23 May 2012, The European Parliament adopts ambitious approach on financial transaction tax. EUROPARL said in the opinion adopted that the the proposed financial transaction tax should be better designed to capture more traders and make evasion unprofitable. The opinion also says the tax should go ahead even if only some Member States opt for it.
The European Parliament consider that the tax rates proposed by the Commission (0.1% for shares and bonds and 0.01% for derivatives) are suitable and pension funds should be the only sector exempted from the tax.
Other important points in the EUROPARL opinion:
- The opinion does not request that the revenues from an FTT be transferred to the EU budget. It does indicate that if the revenues are placed into the EU budget then this would reduce national contributions to the budget; The rapporteur says that such contributions could be reduced by up to 50%.
- The opinion maintains the Commission proposal timetable: 31 December 2013 deadline for Member States to adopt implementing laws and 31 December 2014 for entry into force of these laws.
- The opinion maintains the original proposal to exempt transactions made on the primary market (i.e. purchasing of securities from the issuer when such securities are first placed on the market). This would ensure that investments of benefit to the real economy would not be taxed.
The opinion was approved with 487 votes in favour, 152 against and 46 abstentions.
Speaking after the European Parliament’s vote in favour of the Commission’s proposal for a financial transactions tax, Commissioner Šemeta said:
“I warmly welcome today’s endorsement by the European Parliament of our proposal for a financial transactions tax.
This vote is further recognition of everything that an EU FTT has to offer: a fairer tax system, greater stability of the financial sector, and a new source of revenue that does not ask more of the everyday taxpayer.
The FTT is an opportunity to be seized.
From a small tax we can generate substantial revenues to finance growthenhancing measures, support growth-friendly tax reforms or help fund global challenges such as development and climate change.
Taxing the financial sector is a question of fairness. Banks and financial institutions received – and continue to receive – massive support from the public sector to overcome the crisis. It is not unreasonable to expect them to contribute, in the same way as other sectors, to our collective recovery.
The FTT will help re-build the damaged relationship between the financial sector and the ordinary citizen, by pointing this sector more towards the real economy and helping to restore confidence.
It is now in the hands of Europe’s Finance Ministers to reach a quick decision on the Commission’s proposal for a financial transactions tax. This is what citizens – and now the European Parliament – expect.”