On February 22, USCIB members met with the European Union’s commissioner for taxation, customs union, audit and anti-fraud, Algirdas Semeta, at the EU Mission to the United Nations in New York. The meeting was chaired by EU Head of Delegation Ioannis Vrailas, and the commissioner was welcomed by USCIB Executive Vice President Ronnie Goldberg.
Commissioner Semeta spoke in detail about the debate regarding the EU’s proposed financial transactions tax (FTT) directive, for which a report was released on February 14, as well as the Commission’s views on a global approach to an FTT.
Saying the Commission believes that financial institutions should contribute to the cost of economic recovery, Commissioner Semeta stated that the FTT would also discourage speculative transactions that he said contributed to the financial crisis. He reviewed the more than 40-year policy debate over the FTT – nicknamed the “Tobin tax” after one of its early proponents, economist James Tobin – noting that a principle argument against the tax has been that it cannot be done if it cannot be implemented globally.
The Commission agrees that global implementation is best, he said, but that this is not possible at the present time, and that an FTT can be designed on a regional level. The place a financial transaction takes place is irrelevant; what is important is who trades with whom. The commissioner warned that neglecting the market of the 11 countries poised to adopt the FTT would not be a rewarding model, especially since they represent 90 percent of the eurozone and one-sixth of the global marketplace.
Commissioner Semeta also discussed corporate taxation and answered questions from participants on additional taxation topics as well as customs union.