MEP: EU may force City tax

Tim Wallace
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AN EU-WIDE financial transactions tax could be introduced as a VAT measure, avoiding the UK’s veto on taxation, according to Conservative MEP Dr Kay Swinburne.

She is reported to have told regulators at the Conservative party conference yesterday that MEPs, led by European tax commissioner Algirdas Semeta, had “already started work” on the proposals. That could see the measures passed on a majority vote.

The tax would be devastating for London, according to City of London policy chairman Stuart Fraser. “This is a tax on London – up to 62 per cent of its revenues will come from the UK.” he said. “The Commission’s own impact study shows it would cost more than it would raise.”

Semeta’s spokesman David Boublil strongly denies Swinburne’s claims.

“We have proposed the tax at an EU level and it would require unanimous support to be implemented,” Boublil told City A.M. “If we cannot get every country to agree, those who do want to implement the tax could choose, independently of the Commission, to put the tax in place themselves.”

“We have tried to address the UK’s concerns – by lowering the rate, for example – but the UK could not be forced to implement the tax.”