MILAN Oct 11 Italy's government could raise 1
billion euros a year from a tax on financial transactions but
the levy risks hurting small investors more than speculators,
the head of an Italian brokers' association said.
Italy and 10 other euro zone countries agreed this week to
press ahead with the levy, which according to a European
Commission proposal is set to be 0.1 percent on the trading of
bonds and shares and 0.01 percent for derivatives deals.
The European Commission has said the tax could raise up to
57 billion euros ($74 billion) a year if applied across all 27
EU countries from 2014.
Details on how the tax would work are still sketchy and it
may take two years before the necessary legislation is in place.
The initiative has been pushed hard by Germany and France
but strongly opposed by Britain, Sweden and others. Critics say
it could distort the EU's single market by giving financial
companies incentives to shift business to European centres where
the tax is not levied - or away from Europe altogether.
The head of Assosim, an association of 80 Italian financial
institutions, said on Thursday that based on a similar levy
already in force in France, annual revenues from the so-called
"Tobin Tax" would likely be no more than around 1 billion euros
"It would only raise a modest amount here and it would hurt
small savers and pension funds most, not banks or hedge funds,"
Gianluigi Gugliotta, secretary general of Assosim, told Reuters.
"Brokers will simply pass on the tax to their customers,
which in Italy are mostly retail investors."
Gugliotta said that if the aim of EU authorities was to
discourage high-frequency trading, which involves placing and
then pulling multiple orders faster than the blink of an eye,
the tax risked being ineffective.
"If the tax is applied on the trading balance at the end of
each day, then speculators who place a lot of orders but only
execute a fraction of them would mostly avoid paying," he said.
He said the association was instead proposing a tax on
orders which are cancelled if they surpass a certain rate.
(Reporting by Silvia Aloisi; editing by Andrew Roche)