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The United Kingdom and Proposed European Union Financial Transaction Tax - Essay Example
Finance & Accounting
Pages 9 (2259 words)
The United Kingdom and the proposed European Union Financial Transaction Tax Introduction The European Union financial transaction tax (EU FTT) is an official proposal put forward by the European Commission with intent to introduce a financial transaction tax system within the EU’s 27 member states by 2014…
This EU financial transaction tax is different from a bank levy. Regulators believe that the proposed policy has the potential to raise nearly 57 billion Euros per year. This proposal has been the topic of a hot debate across the European Union since its announcement in 2010 and it still remains controversial among the member states of the EU. This paper will critically appraise the statement that “The United Kingdom should drop its opposition to the proposed European Union Financial Transaction Tax. The benefits accrued from the introduction of such a tax far outweigh the drawbacks”. EU financial transaction tax The provision for creating a new financial transaction tax was proposed by the European Commission President Jose Barroso on 28th September 2011 with intent “to make the financial sector pay its fair share”2. He pointed out that the under-taxed financial segment generated 4.6 trillion Euros during the crisis. Ultimately, through this policy, the European Commission aims to raise direct revenues for the European Union. Ten of the EU member states already impose some forms of a financial transaction tax; and the proposal aims to harmonise different existing financial transaction tax rates. The proposed policy will be applicable if any party to the transaction is located in the EU. ...