EC hits banks with tax crackdown endorsement

The European Commission has added its voice to calls for banks to face higher
taxes because of the huge profits they make.

Working on the basis that the financial sector needs to make a fair
contribution to public finances, and that governments urgently need new sources
of revenue in the current economic climate, the EC put forward a two-pronged
approach.

“At global level, the commission supports the idea of a Financial
Transactions Tax which could help fund international challenges such as
development or climate change,” the EC said.

At EU level, the EC is pushing for a Financial Activities Tax.

If carefully designed and implemented, an EU FAT could generate significant
revenues and help to ensure greater stability of financial markets, without
posing undue risk to EU competitiveness, the EC said.

The commission will present these ideas to the European Council at the end of
October and to the G20 Summit in November 2010.

Algirdas Šemeta, commissioner for taxation, customs, anti-fraud and audit,
said:

“There are good reasons for taxing the financial sector, and feasible ways to
do so.

“I believe that the ideas that the commission has put forward today are the
right ones to ensure that the financial sector makes a fair contribution to the
most pressing EU and global challenges.”

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