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The financial transaction tax will reduce Member States' GNI contributions to the EU budget by 50%
If adopted as a new own resource of the EU budget the financial transaction tax (FTT) will significantly reduce the contributions of member states to the EU budget. According to estimates presented recently by the European Commission, Member States' contributions would be slashed by €54bn in 2020.
The Commission proposes that two thirds of the revenues of the FTT go to the EU budget, reducing by the same amounts Member States' contributions based on their GNI, with the remaining one third being retained by Member States. Therefore, every euro levied with the FTT will ultimately benefit the Member States, whether through direct revenue collection or through a reduction of contributions to the EU budget.
The financial sector does not pay VAT and has received massive support by taxpayer's money, said Financial Programming and Budget Commissioner Janusz Lewandowski. Taxing the transactions of all financial institutions at rates as low as 0.01% is only fair. Furthermore, the estimated revenue which the tax would generate by 2020 can only be welcome by cash strapped governments across the EU.
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