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EU members revive financial transaction tax reforms

Plans to introduce a financial transaction tax have been revived after 10 EU member states reaffirmed their commitment to introducing the levy by January 2016.

In September 2011, the European Commission published proposals for an EU-wide FTT. Within a year it became clear there was not sufficient agreement among member states to introduce the tax.

Last May, 11 member states committed to introduce the levy under a European procedure called enhanced cooperation.

But then European and Monetary Affairs Committee chair Sharon Bowles said the countries were looking for a way to drop the proposal, and it was widely believed the plans had been shelved.

This week 10 member states, including France, Germany and Italy, have issued a joint statement renewing their commitment to reaching an agreement for an FTT.

The statement says the tax should be based on the “widest possible base and low rates”.

It says: “We reiterate our willingness to create the conditions necessary to implement the European FTT on 1 January 2016.

“We are confident that these fresh orientations will provide a sound foundation for the technical work at the council and its preparatory levels for the coming weeks.”

Cicero senior account executive Alexander Kneepkens says: “The statement reaffirms a 1 January 2016 implementation date, which was widely presumed to have been abandoned once an agreement was not reached by the close of 2014.

“This is incredibly ambitious given the amount of time needed to develop the adequate systems to collect the tax.”

Last April, the European Court of Justice rejected a UK legal challenge against the FTT being introduced through enhanced cooperation because it was too soon in the process to rule it out.

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