IMF Warns Europe About Trading Tax

The IMF raised doubts about a tax on financial trading a group of European states is due to bring in next year, saying other levies may be more efficient ways of obtaining revenues from the financial sector.

“According to the IMF there are other levies that could be better than the Financial Transaction Tax (FTT),” Carlo Cottarelli, head of the International Monetary Fund’s fiscal affairs division, told a business conference in Milan on Monday.

“A tax on transactions, in general, is not so sensible, it is something old-fashioned”, he said, adding a levy on the value added of the financial sector or a charge on bank assets would be more efficient.

Back in 2010, the IMF proposed a tax on banks’ profits and managers pay and a levy on assets as a mean of making banks contribute to the cost of cleaning up after the financial crisis but only few countries adopted on of these scheme.

An alliance of 11 European countries led by Germany and France are currently discussing the details of a tax on financial transactions on shares, bonds and derivatives.

via Reuters

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