Restoring social justice through a tax on financial transactions
- Author(s):
- Parliamentary Assembly
- Origin
- Assembly debate on
5 October 2012 (36th Sitting) (see Doc. 13017, report of the Committee
on Social Affairs, Health and Sustainable Development, rapporteur:
Ms Naghdalyan). Text adopted by the Assembly on 5 October 2012 (36th Sitting).
- Thesaurus
1. The continuing global financial
and economic crisis has had disastrous consequences for public finances and
social welfare systems in many member States of the Council of Europe.
It has also revealed serious shortcomings in the functioning of
financial markets: a propensity for excessive risk-taking and speculation,
the inability to ensure long-term financial stability and adequate
funding of the real economy, and distortions in the level playing
field due to the under-taxation of many financial services and instruments.
2. Policy makers must ensure that lessons are learned from the
current crisis and that defences are raised to prevent any such
crises from reoccurring. The Parliamentary Assembly believes that
all stakeholders in financial trading ought to act more responsibly
towards society and the economy in which they operate, for the sake
of the public good and lasting development. It therefore welcomes
proposals by the European Commission and the European Parliament
concerning the implementation of a financial transactions tax on
the widest possible scale.
3. The Assembly notes that many countries – in Europe and worldwide
– already have in place or are about to introduce financial transactions
taxes. Various such taxes on selected financial services and products generate
substantial tax revenue, which proves that a more comprehensive
tax on financial transactions is both feasible and pertinent as
a further step. Although national experiments enable various formulas
for taxing financial transactions to be tested and improved, a more
harmonised, co-ordinated and global approach is desirable to achieve
optimal effect.
4. The Assembly draws the attention of Council of Europe member
States to the political significance, long-term development goals
and social motivations for launching a European tax on financial
transactions. It supports efforts to use this tax as a move towards
stronger economic governance, conducive to a more cohesive society
where every taxpayer contributes a fair share to the public budget.
5. Moreover, the Assembly is convinced that the latest proposals
for a European financial transactions tax have a strong potential
to help close taxation gaps and tackle tax evasion in the financial
sector, to break the vicious circle of self-reinforcing and growing
financial speculation, to improve public finances and to contribute to
restoring social justice through an innovative approach to financing
and solidarity. It notes that, according to public opinion polls,
a clear majority of Europeans supports the idea of a European financial
transactions tax.
6. The Assembly welcomes in particular the agreement reached
in June 2012 between 10 countries to work together under the “enhanced
co-operation” mechanism of the European Union with the introduction
of a financial transactions tax in mind. It urges other European
Union member States to join this mechanism at the earliest opportunity.
7. The Assembly is particularly concerned about the sprawl of
derivative financial instruments, off-exchange transactions and
the related high-frequency trading in modern financial markets.
As these financial means largely escape regulation and taxation,
the Assembly insists on the need for the proposed European financial
transactions tax – together with other complementary regulatory
and supervision measures – to cover these instruments.
8. In the light of the above considerations, the Assembly invites
the Council and the Commission of the European Union to:
8.1 ensure that the financial transactions
tax deals with financial services, products and actors in a comprehensive
manner, in particular as regards the derivative instruments and
off-exchange transactions;
8.2 work towards increasing the geographical coverage of the
financial transactions tax and preventing the relocation of transactions
to countries that do not apply such a tax;
8.3 build partnerships with non-member States and relevant
international organisations, in particular the Organisation for
Economic Co-operation and Development (OECD) and the International
Monetary Fund (IMF), with a view to finding common ground for establishing
a global tax on financial transactions;
8.4 promote the use of the financial transactions tax as a
complementary tool in addition to other regulatory measures concerning
financial markets;
8.5 consider making provisions to commit a substantial share
of revenue from the financial transactions tax to repair the damage
caused by the financial and economic crisis, in particular via priority
funding of measures in favour of sustainable growth, job creation,
social needs and global solidarity action, notably development aid;
8.6 set up mechanisms for monitoring the implementation and
assessing the effectiveness of the tax;
8.7 better inform the public about the modalities of the proposed
tax on financial transactions, the strategic goals pursued and progress
made towards implementing the tax.
9. The Assembly invites the member States of the Council of Europe
to commit in principle to the introduction of a tax on financial
transactions and calls on non-European Union countries from among
the member and observer States of the Council of Europe, as well
as the Assembly’s partner for democracy States, to examine ways
to adopt such a tax on the basis of European Commission and European
Parliament proposals.
10. Finally, with a view to optimising European efforts in favour
of introducing taxation on a broad range of financial transactions,
the Assembly asks national parliaments to support relevant activities
of the European Union, to co-operate with relevant international
organisations and to act at national level towards this end.
