EU May Agree to Lower Transaction Tax
BRUSSELS – The European Commission has laid out a set of suggestions aimed at speeding up the implementation of a financial transactions tax in Europe.
While giving a speech at the European Parliament on July 3rd, the Commissioner for Taxation of the European Commission Algirdas Semeta said that the highly debated financial transaction tax, which is being proposed in Europe, may have to be scaled back in order to guarantee it will be implemented in the near future.
According to Algirdas Semeta, the European Commission is now ready to consider amending the tax by lowering the rates applied to transactions involving “specific market segments”, especially sovereign bonds, pension funds and intra-company transfers.
In his speech Algirdas Semeta said that reducing the tax before launching could be a suitable way forward, and the rate could be hiked in the future, if required.
The issue of taxing sovereign bonds and pensions funds has recently been questioned by experts, claiming that a transaction tax would drastically reduce activity on financial markets without providing any additional benefits to the investors.
The financial transaction tax was initially scheduled to come into force on January 1st 2014, but is now not expected to be enacted until at least the middle of next year, as no final decisions have yet been made regarding the details and administration of the tax.