Financial transaction tax

(FTT) & Sectoral taxation [SK point of view]

Radovan Kavicky, GapData Institute (GDI)28. 2. 2017

(euro·, Hotel Augustine, Letenská

12/33, Praha)

euro· konference (euro.cz)

GapData Institute (GDI)

Economic Research & Public Policy & Data Science think-tank (data-tank)

Data. Think. Change.

GapData Institute (GDI) is a non-profit nonpartisan research institution harnessing power of data & wisdom of economics for public good.

Transparent account (from day #1; SK7383300000002200933920 https://www.fio.sk/ib2/transparent?a=2200933920)

Partnership (openness, transparency)

1/7 Financial transaction tax

(FTT) [SK point of view]

Why sectoral tax? (concept, theoretical basis)

2/7

Tobin Tax (Robin Hood Tax, 2002 FTT unworkable)

-

collapse Bretton Woods (1971), discourage short-term currency speculation (FOREX +liberalisation)

FTT to eliminate distortions in tax system that may have contributed to the 2008/2009

financial crisis

value-added tax (VAT) not applied to financial services (disproportionate growth of the financial sector in recent years)

financial sector contribution to national tax revenues

(implementation in 15 European countries)

Financial transaction tax

(FTT) [SK point of view]

FTT in Europe (genesis)

3/7

2010 (Germany, France) European Commission (EC)

9/2011 EC proposal EU-wide FTT

-

min. 0.1

% tax rate/all types of fin. instruments/stocks, bonds; derivatives min. 0.01

% tax rate

12/2012 European Parliament Approved

1/2013 FTT Enhanced cooperation (9, 11 –

Estonia,

Slovenia)

-

Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia & Slovakia

3/2015, 6/2016

2018? 2019? Ever? (as reaction to crisis/15 countries)

Financial transaction tax

(FTT) [SK point of view]

Slovakia’s “strategy”

(follow/stick to GER)

4/7 Financial transaction tax

(FTT) [SK point of view]

Slovak support from the start (2010, 2011)

-

collapse of the talks (common tax base)

Exclusion: Pension funds, govern. bonds, state enterp.

[2012, Inspiration from Hungary]

-

Special bank tax/levy (0,4% from selected & adjusted passives/0,2bn EUR/more than direct bank/business tax revenue) & 2016, Special insurance levy (8% from non-

life insurance premium)

Why? Why not. (“fair share”

of consolidation)

-

Special tax 4,356% for energy, telecom., insurance, pharmacy sector/mainly foreign investors

What to do now? (position of Czechia)

5/7 Financial transaction tax

(FTT) [SK point of view]

12/2012 CZ Senate (approved FTT)

4/2013 (Petr Nečas opposed)

-

harm of competitiveness of EU’s financial sector

ČNB/Mojmir Hampl, Vice-Governor stated CB opposes FTT (potential negative impacts on economy)

CZ will not participate (also as non-member of eurozone +non-member of the 11 countries)

Slovakia, Hungary & Cyprus used bank levy to finance budget deficit (Czechia w/ budget surplus/no need)

FTT & Sectoral Tax/Problems (+impacts)

6/7 Financial transaction tax

(FTT) [SK point of view]

Reducing investment activities (reducing GDP)

-

slowing economic growth

No impact on reducing risks (no goal/only extra tax)

No extra reserves for possible rescue of banks

Conflict with Constitution (f. e. Slovakia)

Not fair taxation & discriminatory (to abolish)

Without proof of the existence of relevant costs incurred in this sector which should be covered

f. e. SK & CZ banks during the crisis, have not been rescued &

currently enjoying a solid financial health

Other activities (GapData Institute)

Economic Research (studies, papers, publications)

Quantitative & Qualitative

Analyses

-

Data is center of it all

Data Visualization (Interactive DataViz Tools)

Public Policy (Public Budget, Public Finance)

Economic Reforms (any area)

Data Science Tools (R, Python, Tableau, Alteryx)

Open Data & Linked Open Data Cooperation

7/7 Financial transaction tax

(FTT) [SK point of view]

Thank you for your attention

Contact:

Radovan Kavicky

radovan.kavicky@gapdata.org

+420 776 467 159 (CZ)

+421

949

716

214

(SK)

http://www.linkedin.com/in/radovankavicky

@radovankavicky, @GapDataInst

#GapDataInst In case you have any question, feel free to ask.