Now scheduled to go into effect in mid 2014 if the there is an agreement
before the end of 2013 if addressed .by member states.
Additional revenue is always welcomed. Harmonization of taxes across the
EU is also a positive step. Another purpose of the tax was for the financial
services industry to pay back some of the money they received during the credit
crisis.
But will the imposition of this tax drive participants and / or
transactions to offshore markets? Will
all transactions be taxed? What about financing transactions such as “Repos”
and transaction types that don’t currently exist?
A new tax sends a signal to the business affected and often has negative
consequences. I have seldom seen a new
tax or fee that has raised the estimated revenues. In this era of global
markets perhaps a better alternative is to reduce or eliminate existing taxes
to attract new business raising income levels and in-turn tax revenues.
The following questions must be addressed before proceeding to provide
clarity and ensure that undesired effects are avoided.
Does this tax really make sense?
What‘s
the purpose?
What
can the unintended results be?