26 October 2010
European fund managers have expressed 'serious concern' regarding the European Commission's 'flawed' proposal for a financial services tax.
In a statement released in response to the Commission's proposal for the future taxation of the financial sector, the European Fund and Asset Management Association (EFAMA), which represents EUR13 trillion in assets under management across Europe, suggested that the policy reasons advanced by the EC are "seriously flawed" because the funds industry did not benefit from government support during the financial crisis, something which has not been acknowledged by the EU.
“Increased costs due to the introduction of a Financial Activities Tax are likely to be passed on to the end consumer, the investor," commented Peter de Proft, Director General of EFAMA.
"This could result in unwanted distortion as regards the choice for small investors between direct investment in securities and investment through collective investment undertakings," he added. "This should be of concern to governments whose policies are to encourage investors to take responsibility for their own retirement provisions.”
Earlier this month, the European Commission called for the introduction of a so-called financial activity tax (which is being dubbed the 'FAT' tax) within Europe, which would target the profits and remunerations of financial sector companies.
According to Tax Commissioner Algirdas Semeta, his tax would burden businesses rather than individual participants, and could serve to generate up to EUR25bn a year.