Brussels, 31/07/2012 (Agence Europe) - The financial transactions tax (FTT) introduced in France by former president Nicolas Sarkozy comes into force on Wednesday 1 August 2012. It is set at 0.2% rather than the initially planned 0.1%. The tax is expected to net some €170 million this year and €300 million in 2013. The draft amending law voted through by the French Senate on Thursday is expected to bring in some €1.6 billion each year. In the initial draft, the “enhanced stock market tax” was only expected to cover trade in companies with their headquarters in France and working capital of over a billion euro (in other words some 109 companies in total), but the French Senate extended this to cover trade in share certificates in order to restrict the risk of tax avoidance. The French president, Francois Hollande, said on 23 July that some of the tax revenue would be spent on international solidarity, development and tackling epidemics like HIV, but exactly how much is not yet known. Hollande was speaking at an international HIV/AIDS conference in Washington.
Introducing the tax will cause a number of problems and will come at a cost for the financial industry. Professionals say the exact scope of the tax and tax exemptions is hard to understand and will require banks and other financial intermediaries to collect extra information from their customers. Banks will be required to levy the tax and collect it from their investment clients at a time of sharp contraction in the number of transactions as a result of the economic crisis. (FG/transl.fl)