Financial transaction tax tabled by European Commission <br /><br />The European Commission has tabled its controversial financial transaction tax (FTT), despite the fact that only 11 member states out of 27 support it. <br />The tax, proposed by Commissioner Algirdas Semeta in Brussels, has been adopted by 11 eurozone states, including France, Germany and Spain. <br />The FTT aims to raise public funds and encourage more responsible trading by financial institutions. <br /><br />Commission President Jose Manuel Barroso pushed ahead with the tax, despite opposition. <br />But there are fears it will catch non-participating countries in its net. <br />The levy, set at 0.1% for shares and bonds and 0.01% for derivatives, will apply to all transactions "with an established link to the FTT-zone", theEuropean Commission said in a statement, and could raise 30-35bn euros (£26-30bn; $40-47bn) a year. <br />Mr Semeta, commissioner responsible for taxation, said: "On the table is an unquestionably fair and technically sound tax, which will strengthen our single market and temper irresponsible trading." <br />The tax will apply if any party to the transaction is based in a participating member state, regardless of where the transaction takes place - the so-called "residence principle" - and it is this provision that is causing the most controversy. <br />Chas Roy-Chowdhury, head of taxation at the the Association of Chartered Certified Accountants (ACCA) told the BBC: "This tax is actually quite draconian and bad for the eurozone. It will drive a coach and horses through the single market and force banks to relocate outside the FTT zone." <br />Opposition <br />The tax, known as the Tobin tax after the economist who came up with the idea, was proposed by the EC in September 2011. <br />But the 27 member states could not agree, with Britain in particular voicing opposition to the proposal. <br />As a result 11 eurozone countries applied to go it alone under "enhanced co-operation" rules. <br />The Commission agreed and the European Union's Council of Finance Ministers adopted the proposal in January 2013. <br /><br />http://www.bbc.co.uk/news/business-21457562
