Eleven members of the EU agree to delay the financial transactions tax
Brussels quietly delays FTT by six months
Brussels appears to have quietly delayed its Financial Transactions Tax (FTT) amid mounting opposition to the controversial levy across the European Union.
Louise Armitstead By Louise Armitstead, Chief Business Correspondent5:12PM BST 25 Jun 2013Comments14 Comments
Eleven members of the EU, including France and Germany, announced in February they had agreed to introduced the tax by January 2014.
But the European Commission has in the past few days updated its website saying the FTT is expected to be introduced “towards the middle of 2014.”
Tax experts warned that the new tax, which plans to impose a 0.1pc levy on share and bond transactions and 0.01pc on derivatives, would be very complicated to implement.
But the tax has been hit with criticism by businesses and pensions groups. Last month, France’s central bank warned that the FTT could “destroy” parts of the country’s banking industry, cost jobs and harm public finances. Several national versions of the tax have had disappointing starts. France’s version of the tax, launched in August 2012 has raised about half of anticipated income. While Italy’s FTT, launched 1 March 2013, has led to a sharp drop off in Italian share trading.
According to experts, the EC updated its information on FTT in recent days to include the paragraph: “If agreement is found before the end of 2013, and there is a speedy transposition into national law by the participating Member States, this common framework for an FTT could still enter into force towards the middle of 2014.”
Richard Asquith, head of tax at TMF Group, said: “This tax has been rushed in design and implementation, so a delay of at least six months would be no surprise. The countries involved will have to listen more closely to the markets and other countries if they are to get this right.”
He added: “Mechanically it can’t be done. If everyone agrees it will take a year. But politically the resistance for this tax is building.”
The EC did not return calls for comment.