Transaction tax would cost British savers 4.4 billion euros, report says
A planned tax on financial transactions in 11 euro-zone countries would cut the value of household savings in non-participating Britain by 4.4 billion euros (HK$46.8 billion), a report for the British financial sector said on Tuesday.
Britain, the European Union’s biggest financial centre, fears that many trades executed in London will be hit by the tax and is challenging it in the European Union’s top court.
The report from London Economics, a policy and economics consultancy, said the impact would come from the practically instantaneous effect of the tax on the value of household stock and bond holdings.
This would come from factoring in the levy into the price of stocks and bonds held by households, the report said, citing academic evidence.
“In countries that plan to introduce the tax, for example, the impact is in the order of 80 billion euros in Spain to 205 billion in Italy, representing a loss of up to 16 per cent of the value of the assets being taxed,” the report said.
The figures are likely to be disputed by proponents of the tax – particularly France and Germany – which is aimed at recouping some of the taxpayer money used to shore up lenders in the 2007-09 financial crisis.
This week France and Germany are leading efforts to inject more momentum into the tax plan after lawyers for the EU’s member states said some elements were illegal.
The report said the impact on Germany would be 150.6 billion euros.
It was commissioned by the City of London Corporation, which administers London’s financial district, and The CityUK, which promotes Britain’s financial services sector.