Monday, 15 October 2012
Tobin tax rejected by Noonan
MINISTER FOR FINANCE Michael Noonan has rejected an EU financial tax plan over fears that it will lead to the loss of jobs to Britain.
Earlier this year, Noonan said any financial transaction tax should be rolled out on a EU-wide basis, as Ireland would otherwise risk losing financial business to Britain – which has also rejected the proposal.
Following the meeting in Luxembourg, Noonan said 33,000 Irish people worked in financial services – and that if the country accepted a financial transaction tax while Britain did not there would be a transfer of business and jobs to London.
Eleven member states – led by Germany, France, Italy and Spain - have opted into the ‘Tobin tax’, which will see the introduction of a common tax on financial transactions with the aim of encouraging responsible trading and making the markets pay for decades of excess.
“This is a small step for 11 countries but a giant leap for Europe,” Austrian Deputy Finance Minister Andreas Schieder said. “The way is now clear for a just contribution from the banking and financial sector for financing the burdens of the crisis.”
The concept of such levies was first introduced in the 1970s by US Nobel laureate James Tobin, who advocated taxes on transactions to curb market volatility.
The adoption of the tax by so many member states has raised speculation that it could be used to create a common consolidated corporate tax base (CCCTB), which would establish a uniform tax base across EU countries and in turn potentially threaten the benefits of Ireland’s low corporate tax rate.
However, Noonan dismissed such concerns – saying that the CCCTB is not a transaction tax but a corporation tax.