Trade bodies warn over transaction tax

 
Michael Bow
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AN INFLUENTIAL trade body has warned G20 finance ministers’ plans to tax financial transactions are in breach of G20 principles and should be opposed.

The Global Financial Markets Association has written to ministers from the group of 20 urging them to oppose the tax, which they say would have “unprecedented extraterritorial impacts”, and are contrary to the G20’s modus operandi.

The financial transactions tax (FTT) is set to be introduced by 11 EU states by 2014 but the effects are likely to spill over to other countries.

The letter, which is also signed by bodies from Australia, Canada, Japan and Korea, said the plans would harm economic growth at a time when many economies are facing uncertainty.

“The FTT conflicts with repeated calls by the G20 to avoid measures exhibiting extraterritorial effects,” it said.