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European Parliament backs FTT

17 December 2012

Salman Shaheen

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The financial transaction tax (FTT) was brought one step closer last week when the European Parliament voted to allow 11 member states to proceed with it under enhanced cooperation.

The FTT received overwhelming support, with 533 votes in favour and 91 against.

The European Parliament vote was triggered after the Commission gave approval for Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain to introduce the FTT under enhanced cooperation.

Algirdas Semeta, European Commissioner for Taxation, Customs Union, Audit and Anti-Fraud welcomed the vote.

"This is an important procedural step, and a strong political and democratic signal to the member states," Semeta said.

The next step is for the 27 member states to vote on whether the 11 countries can proceed under enhanced cooperation.

"The 11 willing member states must be allowed to move ahead with the FTT, for the sake of fair taxation and a stronger single market," Semeta said. "I urge finance ministers to make this matter a top priority in the new year, and to give the green light needed for the FTT to proceed."

Semeta hopes the FTT will be introduced at the beginning of 2014 if all goes to plan.

The European Parliament wants the FTT to become a model for other countries to follow and the first step towards a global tax.

Whether or not this vision is realised will depend on whether the FTT succeeds in raising significant amounts of revenue while constraining risky transactions, or whether transactions are shifted abroad.

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