The Financial Transaction Tax: Feasibility, Desirability, Political Will David Hillman Director Leading Group 12th Plenary Conference, Abuja 17th January 2014

What is the FTT? Taxing financial transactions such as: stocks, bonds, foreign exchange, derivatives ie futures, forwards, swaps, options European FTT legislation - rates: 0.01 – 0.1% Revenue: 34 billion euro per annum Spending: 50% domestic; 50% international: Development/health (25%) + climate change (25%)

Feasibility Heritage and provenance More than 40 countries: Argentina, Australia, Austria, Belgium, Brazil, Chile, China, Colombia, Denmark, Ecuador, Finland, France, Germany, Hong Kong, India, Indonesia, Italy, Japan, Malaysia, Morocco, Netherlands, Pakistan, Peru, Philippines, Portugal, Russia, Singapore, South Korea, Switzerland, Taiwan, UK, US FTTs only ever implemented unilaterally: re-location of trading dealt with by ‘good design’

Desirability Stability – an anti-churning tax Revenue Leading Group – Innovative Financing for Development – Solidarity Levies Aviation taxes  UNITAID – pilot project

Political Will Policy developed over years – financial crisis –> policy space opened History: 2011 - France  Germany EU 27-country legislation  Enhanced Cooperation Procedure: side-stepping of blockers Current situation: negotiating text  May 6th Allocation: given where initiative started ie here – importance of as a high a proportion as possible going to development

Prospects in Africa The opening of policy space – the FTT is no longer off limits African countries with largest financial sectors can generate the most revenue Revenue can be spent domestically on Public Goods such as health and education It is time the financial sector carried more of the burden