The ACT has responded with the view is that this tax is wholly unwelcome and will not only negatively impact non-financial companies (in addition to the financial institutions it is seeking to penalise) but will also have a disruptive effect on European financial markets and a depressing effect on the economy as a whole.
The Commission fails to recognise that financial transactions in shares, bonds and derivatives, and the related markets assist in the provision of capital and risk reduction for companies and as such are essential for the operation of the economy.
The Commission proposals for a Financial Transactions Tax (FTT) or a Financial Activities Tax (FAT) fail to relate the measures to the genuine excessive risk taking. However, if raising additional revenue is the objective, the ACT believes that a FTT or a FAT is not the ideal method and that a profits tax is likely to be less distorting on financial activity and on the economy as a whole.
For the full response see the attached PDF.
