Brussels, 04/07/2016 (Agence Europe) - The European Commission calculates that the future financial transactions tax (FTT) may generate income of €22 billion in its final implementation stage, according to a note to the delegations dated 29 June, of which EUROPE has had sight.
In its initial implementation phase, during which only the shares of countries participating in the FTT will be taxed and certain derivative products excluded from its scope of application, the FTT may generate €19 billion in revenue. Taxing shares outside the FTT zone could generate €1 billion, according to the Commission's calculations. The long-term debt instruments, which the participating countries have decided to exclude, could bring in €34 billion alone. The Commission's figures should, however, be taken with a pinch of salt, because they cover an FTT zone of 11 countries, yet Estonia has left the group. This is based on the 2013 and 2014 figures at a taxation rate of 0.1% on each side of the transaction for securities and 0.01% for derivatives. In February of this year, Austria proposed defining revenue targets for the future tax, arguing that it would need to generate at least between 15 and €20 billion. Initially, with its proposal, the Commission hoped for revenue in the neighbourhood of €34 billion.
It is also worth noting that at the last ministerial meeting in June, the ministers held an exchange of views on Slovenian tax on financial activities. The Commission is cautiously interested in this, if the FTT should fail. However, the ministers are of the opinion that the FTT should remain the priority. The two working groups tasked with looking into the controversial issues will be led by Italy, for the impact of the tax on derivative products on sovereign financing, and Germany for the implementation costs versus the hoped-for revenue from the future tax. (Original version in French by Elodie Lamer)