Montserrat Casanovas, professor of Financial Economics and Accounting at the University of Barcelona, vice-president of the Catalan Association of Accounting and Management and the Financial Committee of the General Council of Economists of Spain and full academician of the Royal European Academy of Doctors-Barcelona 1914 (RAED ), published on February 2 in the Spanish newspaper “Cinco Días” the article “A vueltas con los objetivos (y defectos) de la tasa Tobin” (On the objectives (and defects) of the Tobin tax), where presents the pros and cons of the bill on Financial Transactions (LTT), recently approved by the Spanish Council of Ministers for processing.
The academician presents the new indirect tax that this law establishes to onerous financial transactions of shares representing the capital stock of Spanish companies admitted to trading on a regulated Spanish market or of another State of the European Union or on a market of a third country considered equivalent, with a capitalization value of more than 1,000 million euros. “The amount of the tax is determined by applying a tax rate of 0.2% to the tax base, the tax is accrued at the time of settlement of the transaction and the taxpayer is the financial intermediary who executes the operation”, explains Casanovas.
The main objective of this new tax is to increase public revenues in order to consolidate public finances. The Government, in fact, has estimated an increase of the annual collection around 850 million euros. But the academician puts on the table the foreseeable negative effects of the tax. “In my opinion, we should be concerned that the implementation of this new tax will also have negative impacts, both for investors and for the stock market itself and for financial intermediaries”, she says.
“From the market point of view, in the short term it could reduce the volume of operations in shares and, consequently, the liquidity of these securities would decrease, and from the point of view of financial intermediaries, there will be an increase in costs administrative costs arising from the liquidation, information and documentation of the tax”, concludes Casanovas.