Financial Transaction Tax: EU Parliament calls for uniform tax rates

EPP Group obtains important changes to planned Financial Transaction Tax

"We are resolutely against any national add-on tax rates. We don't want tax rates mushrooming, as certain governments have already announced", said European Parliament Vice-President Othmar Karas today in Strasbourg. The Parliament adopted the changes to the planned Financial Transaction Tax (FTT) today, proposed by Mr Karas, with a large majority.

"The legislative proposal sets the FTT up as a mere cash cow for national finance ministers. The proposal lacks regulatory effects. Good intentions are not the same as a job well done. The changes we adopted today make the FTT fit for real life. I call on national finance ministers to seize what Parliament decided today", Karas said in the plenary debate. Karas is the EPP Group's negotiator on the tax, to be introduced in eleven Member States only.

Parliament calls for consistent maximum tax rates throughout all participating Member States to avoid imbalances. Karas' proposal to apply a higher tax rate for transactions which take place outside regulated markets, was also adopted. MEPs also voted in favour of Karas' call to review national bank taxes "in the light of progress in EU banking regulation". "The more comprehensive and far-reaching European financial market regulation gets, the bigger the need to remove certain national rules. We need more coherence here", Karas stressed.

Parliament also wants to exempt certain transactions within groups of banks from the FTT. The new 'CRD4' banking regulation requires certain transactions within banks to fulfil liquidity requirements. Furthermore, the EPP Group's call to apply only half of the tax rate to pension fund transactions was adopted.

Parliament wants the income from the FTT to flow into the EU budget, to finance necessary investments for education and to fight youth unemployment. Also, new efforts should be made to introduce the tax beyond the eleven participating countries. "For many years, the European Parliament has been the driving force for a global or European FTT. Such a tax takes full effect only if it is introduced in the entire EU and ultimately worldwide", Karas highlighted. Parliament wants the EU to speak up for this in its cooperation with industry and emerging countries, the G-8 and the G-20 countries.