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Robin Hood tax 'could bring in €45 billion'

The Local Germany
The Local Germany - [email protected]
Robin Hood tax 'could bring in €45 billion'
Photo: DPA

A proposed sales tax on financial services would be highly lucrative for the German treasury, a study from the German Institute for Economic Research (DIW) forecast on Monday.

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Germany's coffers would stand to swell by €45 billion annually if the number of financial transactions currently taking place in the country remained unaffected by such a tax.

France could see increases in tax revenues of €36 billion per year, according to the report, while Italy would potentially raise an extra €6 billion for its coffers.

 
Carsten Sieling, MP for the Social Democratic Party (SPD), told the Süddeutsche Zeitung that the study shows “we need a comprehensive financial transaction tax.” Such a tax would be “useful, feasible and overdue,” he said.

Eleven of the 19 eurozone countries decided three years ago to pursue a financial transactions tax, but its establishment has proven complicated.

On Thursday finance ministers from Germany, Italy, France, Belgium, Estonia, Greece, Austria, Portugal, Slovenia, Spain will meet on the fringes of an Economic and Financial Affairs Council sitting in Brussels to further discuss the proposals.

In its report, the DIW shows how much each of the eleven countries could gain from a proposed financial transactions tax - sometimes referred to as a Robin Hood tax, due to its perceived redistributive effect.

The initial proposals of the EU Commission envisage a 0.1 percent tax on all stocks and bonds transactions, which would apply to buyer and seller. Derivatives would be taxed at 0.01 percent.

Flight to London

Some financial experts warn that the implementation of such a tax would lead to fewer financial transactions taking place in the 11 nations.

They caution that up to 15 percent of all stocks and bonds deals and up to 75 percent of derivatives trading could move to the City of London and other financial hubs.

But even in the worst-case scenario, the German treasury would still take in an extra €19 billion per year in tax.

The tax is supposed to be implemented in 2016, but negotiations have so far proven slow and contentious.

It is seen as a way of making the financial services sector contribute to overcoming the eruozone debt crisis.

According to ARD, numerous German banks and the German stock exchange (Deutsche Börse) have criticised the plan.

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