23 May 2012

Commissioner Šemeta welcomes European Parliament's strong support for the financial transactions tax

Speaking after the European Parliament's vote in favour of the Commission's proposal for a financial transactions tax today, 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 growth-enhancing 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 rebuild 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."

At the Plenary debate, Commissioner Šemeta addressed four main issues:

• "First, the Commission welcomes the idea of exploring how to widen the net over transactions. In this context, elements inspired by the issuance principle should certainly be discussed. We believe however that this approach should be limited to instruments with a clear link to EU territory.
• Second, the Commission is not opposed to making the legal enforceability of a transaction conditional on the payment of the tax. However, the Commission does not see a reason to act at EU level: Member States should decide how to achieve this. 
• Third, the Commission would not support the exemption of UCITS and pension funds. We have defined a broad-based approach for tax neutrality, to avoid distortions of competition and to encourage long term "conservative" investments.  The impact of the tax on pension funds should not be overstated.
• Fourth, although a step-by-step approach could be considered, if necessary, I do not believe this should be modelled on the UK stamp duty. That tax has too limited a scope and leaves most transactions - and notably those of professional dealers – untaxed. With such an approach, we would not meet our policy objectives."

Press release

Speech at Plenary debate

© European Commission