No to financial transactions tax, MEP candidate Sant says

On FTT, Sant says Malta needs to curry favour of other member states to protect its financial services industry

Alfred Sant: not a fan of the FTT
Alfred Sant: not a fan of the FTT

Former Prime Minister Alfred Sant said that Malta should team up with like-minded EU member states to resist a financial transactions tax that is being supported by countries such as France.

The MEP candidate said the tax would hamper the financial services sector in the Maltese economy.

“Luxembourg, Cyprus, Austria and the UK could be potential allies in this effort. Given that financial services account for over 15 percent of gross domestic product, Malta has to concentrate on defending its flexibility in promoting and developing services for which there is a demand. Like other islands, our institutional flexibility is an asset that cannot be given up lightly,” Sant said.

The European Union financial transaction tax (EU FTT) is a proposal made by the European Commission to introduce a financial transaction tax within some of the member states of the EU. The tax would impact financial transactions between financial institutions charging 0.1% against the exchange of shares and bonds and 0.01% across derivative contracts, if just one of the financial institutions resides in a member state of the EU FTT.

On 30 April, the European Court of Justice dismissed an action by the United Kingdom against the authorization of enhanced cooperation by the European Council on the FTT, but didn’t rule out the possibility the UK could challenge the legality of the FTT itself if it is eventually approved.

Sant, speaking at a seminar organized by Finance Malta, said that political sentiment against countries providing financial services had grown strongly in recent months.

“This has been the case especially in Germany and France, and in Spain too if to a lesser extent, including respected politicians of both right and left. The sentiment is expected to grow as new controls are implemented from Brussels on government budgeting within the eurozone and the rest of the EU.

“Governments will be hard-pressed to balance their books and will seek to increase their effective income by preventing losses due to tax leakages. This has taken the form of a campaign against all countries providing professional services, including Malta, being called ‘tax havens’,” Sant said.

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