Wednesday, 7 May 2003
Dáil Eireann Debate
224. Caoimhghín Ó Caoláin asked the Minister for Finance his views on the concept of the proposed Tobin tax on international currency speculation and similar unproductive transactions and the plan to use the proceeds for progressive development and elimination of hunger and poverty in the poorer regions of the world; if he has discussed this proposal with his counterparts at EU or UN level; and if he will make a statement on the matter. [11378/03]
228. Dr. Upton asked the Minister for Finance his views on the introduction of the Tobin tax; and if he will raise this matter at forthcoming meetings of the EU as well as the World Bank and the IMF. [11427/03]
230. Ms Burton asked the Minister for Finance his views on the introduction of tax on currency transactions and other financial transactions, known popularly as the Tobin tax; if he will introduce such a tax at the IMF, World Bank and other appropriate international institutions; and the position of the Government in respect of this matter. [11519/03]
240. Mr. M. Higgins asked the Minister for Finance the Government's position in relation to the Tobin tax on international speculative transactions; and the Government's policy position as it is and will it be represented at such international financial organisations of which Ireland is a member. [11800/03]
241. Mr. F. McGrath asked the Minister for Finance if the Government will consider a tax on currency speculation (0.25%) or Tobin tax; and the Government's views on supporting that proposal internationally. [11801/03]
242. Mr. R. Bruton asked the Minister for Finance if his attention has been drawn to a proposal for a tax on certain financial transactions known as the Tobin tax; and his views on the assessment of the feasibility of such an international initiative. [11828/03]
244. Mr. Haughey asked the Minister for Finance his views on the introduction of a tax on currency speculation known as a Tobin tax to assist the developing countries; and if he will make a statement on the matter. [11852/03]
The issue of the Tobin tax has been considered in a number of fora, including the informal ECOFIN meeting at Liege on 22 September 2001. The Belgian Presidency indicated that it wished to pursue the matter in the context of a general study to be carried out by the EU Commission on the issue of globalisation. However, it would be fair to say that most Finance Ministers, myself included, continue to have reservations about the Tobin tax proposal, and believed that it was not clear that a further examination of the issue by the Commission would ensure that satisfactory answers would be given to the many real questions concerning the tax including: the difficulties relating to practical implementation of the tax; its doubtful effect on short-term speculative capital movements; its conflict with the basic tenet of free capital movement in the EU; its disproportionate effect on small business and consumers; the probability that the tax would simply drive participants into other – non-taxable – alternatives; and the negative impact on liquidity in the foreign exchange market.
Nevertheless, at a formal ECOFIN meeting on 16 October 2001 it was agreed that the Commission would carry out a study on globalisation and that this study would examine the arguments for and against a Tobin tax. This study, Responses to the Challenges of Globalisation, was published on 14 February 2002. On the matter of the Tobin tax, the study concluded that, “While as a source of additional revenue a currency transaction tax may look appealing, its feasibility is, however, not demonstrated.” In these circumstances, it is not clear what can be gained by my raising the matter further in the fora mentioned in the questions and I do not plan to do so.
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