Patrick Nulty (Dublin West, Labour)
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Question 96: To ask the Minister for Finance if he supports the introduction of an international financial transactions tax or Tobin tax. [36944/11]

Michael Noonan (Limerick City, Fine Gael)
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The European Commission published last month its proposal for a Financial Transactions Tax, or FTT, and its assessment of the impact of the measure.

We are analysing the proposals contained in the draft Directive. The measure will now be subject to detailed discussions at EU level and, as always, we will participate constructively in those discussions. There is no consensus as yet among European Member States on this issue, either about whether an FTT should be introduced, or what precise form it should take.

It is important that any proposal does not have the effect of encouraging relocation of activity or damaging the EU's competitiveness in financial services. It is for this reason that there is an emerging view that the EU and other international groupings, such as the IMF and G20, should move in tandem in a global manner to avoid the danger of financial sector business gravitating to jurisdictions where taxes are not levied on financial transactions. Indeed the Commission has indicted that they see their proposal as part of a wider development in this area.

In my view any tax would be best applied on a wide international basis to include the major financial centres. I also think it important that the proposed Directive would apply on an EU wide basis to prevent any distortion of activity within the European Union.

The Commission is proposing that the FTT should be an "own resource" tax imposed centrally to fund the EU and will be developing proposals in the context of the future of the EU Budget. However, we will need to assess the impact of this on our contribution vis-À-vis any system based on Gross National Income, as is the current system.