Sunday 22 October 2017

Noonan snubs UK bid to block EU 'Robin Hood tax'

Activists wearing masks depicting German Chancellor Angela Merkel and French President Francois Hollande protest in Brussels
Activists wearing masks depicting German Chancellor Angela Merkel and French President Francois Hollande protest in Brussels
Donal O'Donovan

Donal O'Donovan

Ireland won't join a UK legal challenge to a 'Robin Hood tax' backed by Germany and France but rejected by most EU members.

Finance Minister Michael Noonan said yesterday that the planned financial transactions tax (FTT) now appears likely to look much like the Stamp Duty charged in Ireland and the UK on share purchases, following a meeting of European Finance Ministers in Brussels.

The idea for the levy, also known as a Tobin tax – named after US economist James Tobin – was raised by German Chancellor Angela Merkel and the then French president Nicolas Sarkozy in 2011 when the economic crisis was at its worst, and was promoted as a way to ensure the financial sector contributed to the cost of resolving the situation.

Yesterday finance ministers from 11 of the 28 EU member states who have signed up to a common FTT said they will introduce the new charge on January 1, 2016, at the latest.

Sweden's finance minister Anders Borg and UK chancellor George Osborne oppose the planned tax and may revive a legal challenge to block it.

Ireland is not one of the participants, but has no plans to join any efforts to block it, Michael Noonan said.

"We didn't get any detail but from the information we have we are quite happy to let the group who want to implement the tax go ahead and implement it for their countries," Mr Noonan said.

"There were issues raised (at the EU ministers' meeting) about ensuring countries not participating were fully informed about any unintended consequences there might be of the impact of a tax crossing state boundaries from the countries implementing it.

"There were absolute commitments that everybody would be fully informed," Mr Noonan told reporters in Brussels.

Despite yesterday's agreement, key questions such as how high the tax should be and how it will be charged have yet to be determined.

"As you know we have a stamp duty on shares. The proposal now seems to be a stamp duty on shares and a stamp duty on some derivatives," Mr Noonan said in Brussels.

"I believe we will reach a political agreement on a financial transactions tax – all ministers are ready," Luis de Guindos, Spain's economy minister, told reporters.

"I hope we will reach agreement on the assets to be included, mainly shares and some derivatives," he said.

Some EU watchers see the reaffirmation of some governments' commitment to the tax as a political move ahead of European elections and expect the scheme to be quietly shelved afterwards because it is difficult to implement.

Anders Borg, the Swedish finance minister and critic of the project, reiterated his opposition to what he called a "very inefficient and costly tax". "The lack of information on the proposal is a real problem," he said.

Britain's finance minister George Osborne told ministers it was "a tax on jobs . . . a tax on people's pensions".

Since the tax was first mooted in 2011 estimates of the revenue anticipated to be raised have plummeted from the original €35bn a year to as little as a tenth of that. (Additional reporting Reuters)

Irish Independent

Also in Business