01/12/2011
EFAMA denounces cost of proposed financial transaction tax
The European Financial and Asset Management Association (EFAMA) has called recent comments that suggest that a tax on financial transactions sought by some regulatory parties would contribute to the service sector of the economy and to society at large “misleading,” in a statement on 30 November.The association claims that the remarks are misleading since the economic cost of the tax would in practice be borne by the end consumer, including savings investors and pension fund policyholders. The impact of the tax on the fund sector on the long-term savings market would be “significant,” not only because the main taxes would be “relatively high,” but also because the plans in their current form would result in multiple taxation.In the case of investment funds, for example, the tax would apply both to funds (on transactions on assets in their portfolios) and to their investors (on transactions on shares in the funds). The use of financial intermediaries for sales of fund shares is also an example of how the acquisition of shares by a single investor could imply multiple transactions throughout the distribution chain, and thus several places where they might be liable to be taxed.
