MEPs Push Transactions Tax

by Ulrika Lomas, Tax-News.com, Brussels

04 March 2010

According to the European Development Committee, European member states must not only deliver on their international aid pledges, but must also introduce a financial transactions tax and a temporary debt moratorium, in order to help developing countries to cope with the effects of the global financial and economic crisis.

According to a recent European parliamentary statement, European Members of Parliament (MEPs) are firmly convinced that taxing banking transactions "would be a fair contribution from the financial sector to global social justice". At the same time, MEPs are calling for an international levy on financial transactions to make the tax system more equitable and to generate additional resources for development funding, including meeting climate change adaptation and mitigation costs of developing countries.

The statement also highlights a warning from MEPs that "the negative impact of tax havens may be an insurmountable hindrance to economic development in poor countries," given that it undermines national tax systems and increases the cost of taxation.

Consequently, MEPs have emphasized the need for "a new binding, global financial agreement which forces transnational corporations, including their various subsidiaries, to automatically disclose the profits made and the taxes paid on a country-by-country basis, so as to ensure transparency about sales, profits and taxes."

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