The European Parliament is calling on the European Commission to introduce legislation for a financial transaction tax.
This week, the parliament backed a report calling for the tax as its submission to an EC consultation on taxing financial services. The report, by Greek Socialist MEP Anni Podimata, suggests a tax of between 0.01 and 0.05 per cent on every type of transaction to avoid flows towards less regulated parts of the financial sector.
The report adds that the tax should have clearly defined exemptions and thresholds.
The European Commission is carrying out an impact assessment of the proposal. It supports the financial transaction tax at a global level but in the past has suggested if such a measure was introduced at a European level only, it would prefer to impose a financial activities tax targeting remuneration of financial services firms.
Cicero Consulting analyst Tim Gieles says the largest group in the parliament, the 265-MEP European People’s Party, has introduced a caveat to its support. He says: “The EPP emphasises that only if the Commission’s impact assessment is favourable to the tax at an EU level will the group support it.”