The 11 participating countries remain divided on whether to tax all derivatives, only equity derivatives or no derivatives at all, EU documents show. Finance ministers from Germany, France, Italyand Spain, as well as the UK, which has opted out of the tax, meet in Paris.
Proponents of the FTT, led by France and Germany, are trying to reach an agreement before the election in a bid to woo voters. The governments are now debating a phased approach that could target a wider range of trades in future years. "The very big risk is for countries to say OK, we will tax derivatives, but with no strict time line. This would be an empty promise", Alexandre Naulot, policy adviser for Oxfam France, said. "The FTT has to be used to tax the richest people to give to the poorest." EU nations should move ahead with the tax and use the funds to combat climate change and help the developing world, Naulot said.
Tax proponents say officials could tap data collected by financial regulators to make sure that banks and other companies are paying as proposed, while opponents warn that the tax could damage financial markets without raising much money. The nations pushing for the levy are also split over who should get to collect it - a trading firm’s country of origin or in the nation where trading takes place. On May 6, finance ministers from all 28 EU countries will hear a progress report on transaction-tax proposals. "We are ready to back any compromise that the 11 reach on the FTT, so long as it doesn’t create distortions or enable tax avoidance", EU Tax Commissioner Algirdas Semeta said.
"A possible way forward would be to continue working on the progressive implementation of the tax", said one of the documents, prepared by Greecein its role holding the EU’s rotating presidency. That effort "could focus on the taxation of shares and derivatives". Germany, France, Spain, Italy, Belgium, Austria, Portugal, Greece, Estonia, Slovakia and Slovenia have signed on to the transaction tax effort.
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