France to press ahead with financial transaction tax

France is to introduce its own financial transaction tax, French president Nicolas Sarkozy has revealed.

Sarkozy says the tax will be levied at 0.1 per cent on financial transactions but he did not specify what asset types it will capture.

According to Reuters, a government source said it would target shares but not bonds, and could raise a billion euros annually.

Sarkozy also announced a 1.6 per cent VAT hike to 21.2 per cent to finance a cut in payroll charges paid by employers.

In December, British prime minister David Cameron vetoed a EU treaty partly to avoid the implementation of a European financial transaction tax that he said would damage Britain’s competitiveness.