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Europe backs a tax on banks


The EC backs a financial tax

This month has seen Europe back a tax on banking activities that could raise as much as £22bn.

The European Commission (EC) is proposing plans for a two-pronged tax strategy - a Financial Transaction Tax (FTT) that would need to be implemented globally and a Financial Activities Tax (FAT) to operate within Europe.

“This is good progress,” said Anton Kerr, head of policy at the Alliance. “We have just taken a step closer to a Robin Hood Tax but we need to ensure that a significant proportion of the money that is raised through European taxation will go to the poor and support health initiatives, development and climate change in the developing world, where it is desperately needed.”

A FTT would tax every transaction based on its transaction value, resulting in substantial revenue raised.

At a European level the Commission is considering implementing a FAT. This would target the profits and remunerations of financial companies.

The EC worked on the basis that the financial sector needs to make a fair contribution to public finances, particularly because the finance sector was a major cause of the financial crisis and received substantial financial support over the past few years.

With urgently needed new sources of revenue in the current economic climate required the two pronged approach was put forward to contribute to the cost of re-building Europe’s economies.

The ideas will be presented to the European Council towards the end of this month and then to the G20 Summit in November, with the aim of encouraging international partners to agree on a global approach.

“All that is needed now is the political will to ensure that this continues to move forward,” added Marielle Hart, head of EU policy at Stop AIDS Alliance in Brussels. “Stop AIDS Alliance will be closely monitoring developments.”