LISBON Feb 19 A financial trading tax will hurt
Portugal's already weak competitiveness and the country should
at least wait until its European partners fully apply it before
following suit, the head of the NYSE Euronext Lisbon bourse said
Portugal's government said in this year's budget it aims to
impose a transactions tax of up to 0.3 percent, going beyond the
European proposal for a tax rate of just 0.1 percent, but it has
yet to put forward the actual legislation.
"For countries like Portugal that have a great need to
attract capital, any such onerous move can only produce the
opposite affect from what is intended", Luis Laginha told a
banking and investor conference.
"We're not in favour of the tax, we say it loud and clear."
The European Commission last week formally proposed the tax
in 11 countries from 2014 to boost revenue and make banks pay
for taxpayer help received in the financial crisis, raising up
to 35 billion euros annually.
A further 16 EU nations have rejected the idea, with critics
saying it will cut trading volumes, hurt future pensions and
perhaps lead to double taxation.
Portugal, whose economy has suffered from weak
competitiveness for more than a decade, is in its worst
recession since the 1970s as it applies painful austerity
measures under an international bailout programme.
The head of the Portuguese Banking Association, Fernando
Faria de Oliveira, told the conference the planned tax was
"another competitive disadvantage for Portuguese banks" that
could "displace transactions, diminish market liquidity and have
very negative effects on the economy".
No government officials spoke at the conference.
Euronext Lisbon's Laginha said that if the tax was
adopted, Portugal should insist on its universal application and
not impose it before all its financially relevant partners
commit themselves to the measure.
Laginha said that the planned measure does not take into
consideration Portugal's weak ability to attract investment
compared to its European peers and that its competitiveness
would be further hurt as a result.
(Reporting By Sergio Goncalves, writing by Andrei Khalip;
Editing by Hugh Lawson)