BERLIN, Nov 24 (Reuters) - The German Finance Ministry does not expect a financial transaction tax for 11 euro zone countries to be introduced before 2016, according to a report in Germany’s Wirtschaftswoche business weekly magazine.
Wirtschaftswoche quoted a senior Finance Ministry official, Michael Sell, telling a meeting of accountants in Berlin that the financial transaction tax would not be collected until 2016, or about two years later than previously believed, due to the pace of international negotiations and technical reasons.
“I would not include in the budget anything from the financial transaction tax before 2016,” Sell told the meeting of accountants in Berlin, the magazine said.
A spokesman for Finance Ministry declined to comment on the report the introduction of a financial transaction tax would be delayed by a year or two to about 2016. There were hopes last month that the tax could be raised in 2014.
In October, 11 euro zone countries agreed to press ahead with the tax on financial transactions aimed at making traders share the cost of fixing a crisis that has rocked the single currency area.
The initiative was pushed hard by Germany and France but strongly opposed by Britain, Sweden and other proponents of free markets. It was in the works for two years. Britain, home to the region’s biggest trading centre, will not join the scheme.
Austrian Finance Minister Maria Fekter said last month the 11 countries would present a model for how the tax would work by the end of 2012 and it was realistic to expect the tax to be implemented by 2014.
The European Commission has said a tax on stocks, bonds and derivatives trades from 2014 could raise up to 57 billion euros ($74 billion) a year if applied across all EU countries.
The Finance Ministry spokesman in Berlin declined to comment on the timing of the tax’s introduction.
“We’re working with intensity and great engagement on the introduction of the tax on the path to increased cooperation and we’re confident that there will be an agreement,” the spokesman said when asked about the magazine report.
The Wirtschaftswoche report quoted Sell estimating negotiations in the EU states about the transaction tax could take a year and a half. A similar amount of time would then be needed for the implementation of the financial transaction, he said, because the tax could only be collected electronically.
Sell also said he thought it was possible that the financial transaction tax could be implemented in London as well on shares and bonds trading but not derivatives. Britain has a stamp duty of 0.5 percent on share trades, raising almost 3 billion pounds in the financial year to April 2011.
Commonly known as a “Tobin tax” after Nobel-prize winning U.S. economist James Tobin proposed one in 1972 as a way of reducing financial market volatility, it has become a political symbol of a widespread desire to make banks, hedge funds and high-frequency traders pay towards a wrenching debt clean-up.
The October deal raised the prospect of a pioneer group of European states for the first time launching a joint tax without the unanimous backing of the 27-nation bloc, a move that may fragment the Union’s single market for financial services.
Critics say it could distort the EU’s single market by giving financial companies incentives to shift their trading activities to European financial centres where the tax is not levied - or away from Europe altogether. (Writing By Erik Kirschbaum, editing by William Hardy)