Lithuania's new PM commits to joining EU financial transaction tax

By bne IntelliNews December 17, 2012

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Lithuania is to join the planned Eurozone financial transaction tax, new Prime Minister Algirdas Butkevicius said on December 14 in his first written statement since taking office the previous day.

"Lithuania should become the 12th country to approve the financial-transaction tax and join the enhanced cooperation procedure, I hope, in January," the PM's statement announced following a meeting in Vilnius with EU Tax Commissioner Algirdas Semeta, reports Bloomberg.

The move would see Lithuania join the eleven Eurozone countries that have signed up for the new tax, which Brussels is pushing as a means of reducing risk in the markets, as well as a revenue raising measure to help recovery from a crisis for which many consider the bankers to have significantly contributed to creating.

The European Parliament gave the green light to Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain to embark on the plan on December 12. MEP Anni Podimata told the house: "It is not a solution to spare the financial sector from a tax, the very same sector which is now even benefitting from the crisis. Delay in implementing this tax is costing money which is being footed by normal people."

Semeta, a former Lithuanian finance minister, is a proponent of offering the planned tax to willing non-Eurozone nations, a move he says would make the EU common market stronger and fairer. He claims banks are paying not enough taxes to national budgets, while financial transactions are also exempt from VAT.

"When you buy water, you pay VAT, whereas [when you purchase] financial services you do not. Thus the tax burden on the financial sector is less than on the others," says the commissioner. Semeta is proposing to introduce a tax rate of at least 0.1% for trades in shares and bonds.

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