IT HAS TAKEN the best part of 50 years to get to this point, but a Tobin Tax - in a somewhat different form from the original - is imminent.
For one thing, the seed idea was that it would be a global levy on financial transactions, but instead the charge will be brought in across just 11 EU countries and applied to currencies, bonds and shares traded at banks and financial institutions.
The proposals, published this week by EU tax commissioner Algirdas Šemeta (pictured), will form the basis for talks between the states, without the need for the go-ahead from opponents such as Sweden and the UK, among others.
Crucially, the tax will apply to transactions based on where the financial product was issued, and while it won't even be Europe-wide, it could regularly affect trades made not only in Paris and Berlin, but London (despite the UK's opposition) and even further afield.
It's a move that strikes me as, at best, unwieldy. It does not matter whether the trade was made in Buenos Aires, Tokyo or Kinshasa; if there is a party involved at any point from the Tobin Tax zone, tax is due.
As a result, there is a huge reliance on co-operation from governments and financial groups outside the tax zone, and while some undoubtedly will co-operate, imposing the levy in countries or on groups unwilling to acquiesce seems a grim task - indeed foolhardy.
The US, for example, does not appear impressed in the slightest, branding it a tax that "harms US investors in the US". Then there are the large investment banks preparing lawsuits. It seems, at the very least an uphill battle.
Not only that, but the way the tax works has caused concern. Unlike stamp duty, the tax cascades, applying separately to each leg of a financial transaction. So while the headline rate of the tax is 0.1%, the effective rate in many cases will be closer to 1%, something Clifford Chance tax partner Dan Neidle says is not clearly understood, while there are questions over whether the cascade is intended.
Brussels may well have have bitten off more than they can chew in undertaking such an extra-territorial levy, and while changes could conceivably be made between now and the tax's introduction, it seems likely only the fine print will alter.
It's a far cry from the original Tobin Tax, and while it is not global, it does, at least in principle, have a worldwide reach.
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