The Leading Group continued its work on a very low tax to fund development (and not a regulation Tobin-type tax) based on globalized activity and coordinated internationally without generating economic distortions. Participants pointed out that a number of countries introduced taxes on financial activities (based on a bank report) since 2008 but whose purpose was essentially domestic (financing the general budget or funds to resolve future bank crises) and that the time was right to discuss a financial transaction tax to fund international solidarity-based action.
Lieven Denys and Takehiko Uemura, who have worked for the Task Force on International Financial Transactions for Development established in the Leading Group in 2009, explained that a financial transaction tax for development (MDGs and Global Public Goods) needed to pass a five-criteria test : sufficient resources, no distortion, technical feasibility, stability and predictability.
With regard to these criteria, a tax based on currency transactions seemed to be the best option among the five studied. On behalf of the non-governmental organization, Stamp Out Poverty, David Hilman stressed the need to avoid any requirements for universal implementation : financial transaction taxes are not uncommon, nearly 40 countries, including the United Kingdom with its stamp duty, already use this type of tax instrument. In response, several participants underlined the technical feasibility of such a mechanism and their interest in it.
To conclude, Belgium stressed that the stage of demonstrating technical feasibility was over and decisions could now be made as to whether this type of instrument is politically advisable.
Le 14 février 2011