Published: 9 october 2012 11:23
BNS

Lithuania will not join supporters of EU financial transaction tax

Lithuania does not object to the introduction of the financial transaction tax (FTT) in the European Union (EU) as such but does not intend to join the countries that back the new levy and seek an enhanced cooperation accord to push the tax forward, Finance Minister Ingrida Šimonytė has said.
Ingrida Šimonytė
Irmanto Gelūno/15min.lt nuotr. / Ingrida Šimonytė

“Such a tax, as proposed by the European Commission, would not be significant for Lithuania, a country with dominant traditional banking and traditional financial instruments, either in terms of budget revenues or limitation of undesirable financial transactions,” Šimonytė told BNS.

ECOFIN discussions in June showed clearly that this proposal would not be accepted unanimously and all tax decisions in the EU required unanimity, she said.

“Therefore, a possibility to implement such a decision through enhanced cooperation procedure will be examined at the initiative of certain member states,” Šimonytė said adding that Lithuania did not intend to join this initiative for the meantime.

Six EU states have so far sent letters to the European Commission backing the FTT, which needs the support of nine to proceed, the news agency AFP reported.

France and Germany are leading the drive on the FTT, writing last week to European Taxation Commissioner Algirdas Šemeta and EU colleagues seeking an "enhanced cooperation" accord to allow the tax to go ahead.

Alongside France and Germany, the EU sources said Austria, Belgium, Portugal and Slovenia had now also sent similar letters to the Commission. Estonia and Greece are believed to also favor the introduction of the tax.

According to AFP, in June, the Commission tried to introduce the tax but failed to get enough support from all 27 EU states.

Under its provisions, a tax of 0.1 percent would have been levied on share and bond trades, and 0.01 percent on other transactions, generating billions of euros in revenue according to the Commission. The levy would be charged on all transactions where at least one party to the trade is established in the EU.

Opposition to the tax is led by the UK which claims that the levy would prompt investors' exodus to other financial centers.

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