EU Parliament Supports Implementing Financial Transaction Tax

The European Parliament has adopted two resolutions urging the European Union to impose a financial transaction tax and give more tax-related development assistance to developing countries while combating fraudulent practices and tax evasion.

The resolutions call for the development and implementation of a low-rate financial transaction which the members of Parliament say could raise up to €200 billion ($278.18 billion) per year. One of the resolutions says the tax should be immediately imposed at the EU level if doing so worldwide proves to be difficult. The same resolution also calls for more measures to combat tax fraud and tax evasion in EU member states.

Some non-governmental organizations have been pushing for the use of the financial transaction tax to raise development funding. French President Nicolas Sarkozy has also supported the proposal for a financial transaction tax and said it should be a priority of the Group of 20 countries.

>> In Davos, Nicolas Sarkozy Calls for Financial Transactions Tax

>> Aid Group Wants Financial Tax in G20 Agenda >> Oxfam International Renews Call for Financial Transaction Tax

The other resolution, which was drafted by Parliament’s development committee, calls on the EU to provide more tax-related assistance to developing countries and clamp down on tax havens by preventing multinational companies from “transferring their profits to countries with the most favorable tax regimes.” They [multinationals] should pay taxes in countries where they generated their profits, the resolution says.

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About the author

  • Ivy Mungcal

    As former senior staff writer, Ivy Mungcal contributed to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean, and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.