Finance sector actors slam mooted transactions tax
German financial sector players wasted no time Wednesday in slamming a proposed financial transactions tax, saying it would push business to rival global centres and be hard to enforce.
Deutsche Boerse, which operates the Frankfurt stock exchange, said the tax, which German Chancellor Angela Merkel and French President Nicolas Sarkozy endorsed on Tuesday, would "incentivise" shifts into unregulated markets.
Shares in the market operator itself were by far the biggest losers in midday Frankfurt trading, showing a loss of more than 7.5 percent.
The federation of German mutual banks (BVR) added meanwhile that "it is to be feared that speculative transactions as well as the income sought from the financial transaction tax would migrate to other financial centres."
"Although the efforts to stabilise financial markets are justified, we believe a financial transaction tax for the eurozone would be an inappropriate measure to effectively ban supposedly speculative transactions," a BVR statement said.
In addition, such a tax "must not be allowed to have a negative impact on normal hedging activities on foreign exchange markets which are needed by companies in the real economy," the banking federation said.
Deutsche Boerse stressed doubts about the regulatory and fiscal impact of a broad-based tax scheme, and warned that it would be difficult to track all transactions.
Frederic Donnedieu de Vabres, head of the tax advisor firm Taxand, said: "This type of knee-jerk blanket tax is simply too complicated to implement and would require a fundamental overhaul in country-specific tax policy.
"In the current global economy where there is a very real need to focus on recovery, an overhaul of global tax harmonisation appears still to be light years away," he added.
© 2011 AFP