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Slovenia Explains Cold Feet On EU FTT

by Lorys Charalambous,, Cyprus

27 May 2014

Slovenia is considering withdrawing from the list of countries that plan to adopt a Financial Transactions Tax in the European Union, owing to concerns that its base is too narrow.

This was confirmed in comments from Slovenia's Prime Minister, Alenka Bratušek, following Slovenia's decision earlier this month not to include its name in a joint concluding statement after a meeting with other participating states on the development of the FTT. They hope that the tax can be phased in progressively from 2016.

Bratušek told Parliament on May 19, 2014, that Slovenia had supported the FTT on the basis that it would apply to a broad tax base, be set at a low rate, and be simple to administer. However, the current proposals are going in the opposite direction, she said.

She added that Slovenia currently collects EUR40m (USD12.36m) each year from an existing tax on financial services, and a further EUR20m from bank assets. She noted that this is "significantly more" than would be raised by the proposed FTT. It is thought that the tax will cost Slovenia EUR2m to administer, and raise just EUR3m.

If Slovenia withdraws its support, there would be ten remaining countries in the EU that are working towards creating an FTT zone under provisions for "enhanced cooperation" within the EU: Austria, Belgium, Germany, Estonia, Greece, France, Italy, Portugal, Slovenia, and Spain.

In Belgium, the proposals have also be criticized by the Federation of Enterprises, which has called on the Government to pull out of the talks.

Under the enhanced cooperation procedure, nine nations must adopt the levy or the proposals must be ditched.

TAGS: tax | Slovenia | financial services | tobin tax | European Union (EU) | services | Europe | Tax

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