Germany's DGB Demands Tax On Financial Transactions

by Ulrika Lomas, Tax-News.com, Brussels

28 July 2009

Calling for a tax to be levied on all financial transactions, the Confederation of German Trade Unions (DGB) has proposed that a stock market sales tax, levied on the sale of shares and derivatives, could be introduced in the first instance.

According to the DGB, a tax on financial transactions would not only serve to curb high-risk speculation, but would also generate increased revenue for the State.

A tax on financial transactions would, the DGB maintains, predominantly affect speculators, given that the more an investor opts to buy or sell stocks and shares, the more tax he would then have to pay. Long-term investors, on the other hand, would be only mildly affected.

DGB calculations show that simply imposing a tax rate of 0.1% on all transactions conducted on the stock market could generate as much as EUR13.5bn per year for the German government.

Demanding an urgent – and radical – overhaul of the financial markets, the DGB is also calling for the Federal Financial Supervisory Authority BaFin to inspect all financial products in future, before they are allowed onto the market, in order to better protect consumers.

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