The 27 member states of the European Union on Tuesday decided to take the first step to implement a new tax on market transactions which will bolster government funding in sectors such as health and environment.
This new levy is called Financial Transaction Tax (FTT) but is more popularly called the Robin Hood tax, after the English folklore hero and outlaw who robbed the rich to give money to the poor. FTT is a small tax amounting to 0.1 per cent on secondary market transactions such as stocks, derivatives, currency and other such transactions.
So far only 11 European Union members have agreed to have a common FTT regime, but in order to do so it required the approval of the 27 member states of the EU. Industry groups, especially ones involved in stocks, currency and derivatives had earlier warned that such a move would hamper trade of these items in Europe with a possibility of driving them away from the continent.
Most of the major economies, including France, Germany and Italy have decided to be a part of this new taxation system; Britain has so far resisted joining the club.
This was the first meeting of the Economic and Financial Affairs Council of the EU in 2013, where the new tax regime was decided. Announcing this at a press conference in Brussels, Algirdas Semeta, the European commissioner in charge of tax policy called it a “major milestone”. Without revealing the estimated revenue from this move, Semeta said that if all the EU members joined in it could generate about Euros 53 billion (over US $70 billion). Currently, the 11 countries willing to take on this tax comprise about 67 per cent of the EU economy.
Oxfam has estimated even with just a handful of countries committing to FTT, it could generate about Euros 37 billion every year, which could help 550 million of the world’s poor get access to free health care.