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EU Commissioner for Taxation and Customs Union, Audit and Anti-Fraud
"Taxing the Financial Sector"
Brussels, 7 October 2010
Ladies and Gentlemen,
I am pleased to present to you today the Commission's vision for the taxation of the financial sector.
In recent months, there has been very wide public debate on this issue. Many different opinions have been voiced on whether and how to introduce a new bank tax, and indeed it is a subject that attracts a lot of popular attention.
The Commission's aim has always been to steer an informed and rational debate on financial sector taxation.
In order to find the right approach, we have taken the time to properly assess the various options, and weigh them up against clear objectives.
Let me remind you of what these objectives are:
First, we must make sure that the financial sector is making a fair contribution to public finances. This is particularly important given its privileged position in the economy and the support it received during the crisis.
Second, we must make sure that any tax we put forward offers real benefits: that it will raise substantial revenues without undermining EU competitiveness
Finally, we must ensure that a patchwork of divergent national financial sector taxes do not create new obstacles to the Single Market.
On this basis, the Commission believes that a two-pronged approach to financial sector taxation is the best way forward.
At EU-level, we have evidence that the financial sector is currently under-taxed, and not contributing as it should to our re-growth in the wake of the crisis.
We need to redress this problem. A Financial Activities Tax appears to be the best way to do it. Taxing the profits and wages of the financial sector could ensure that it is taxed fairly, while also generating much-needed revenues.
In addition, a Financial Activities Tax could avoid many of the risks to EU competitiveness that other taxation tools would pose.
At global level, the Commission strongly supports the idea of a Financial Transactions Tax.
There are important international challenges which we must urgently respond to – climate change and development aid, for example. And these need to be financed.
I am fully committed to campaigning for a financial transaction tax internationally, and the Commission will continue to work hard within the G20 to reach agreement on it.
To conclude, the ideas I have presented today are based on sound economic analysis and extensive discussions with Member States, the European Parliament and other stakeholders.
They are built on the conviction that there are good and justifiable reasons for an additional tax on the financial sector.
They also support the belief that, with the right choice of tax and its proper implementation, we could have an important new source of revenue while still maintaining our competitiveness.
I will discuss our position with EU Finance Ministers on the 19 October, and the Commission will report to the European Council on this matter at the end of the month. In parallel, I will give this matter high priority within the Tax Policy Group which I will launch next week.
My aim is to continue to work on these options, in order to bring forward policy initiatives on the taxation of the financial sector in 2011.