Ireland ‘already has a transaction tax’

Micheal Noonan, the finance minister, is not in favour of introducing a financial transaction tax as the Department of Finance says Ireland already has one — stamp duty.

A spokesperson for the department said Ireland already operates a financial transaction tax at 10 times the rate proposed by the French administration.

“The French proposal for a transaction tax of 0.1% on significant share transactions would appear to be quite similar to a stamp duty on transactions,” the spokesperson said.

“In Ireland, we already have stamp duty of 1% on share transactions — 10 times higher that the French proposal.”

The proposed Europe-wide tax would charge financial institutions 0.1% against the exchange of shares and bonds and 0.01% across derivative contracts.

For the first time last year, stamp duty here on share transactions outstripped that paid on land. The Revenue Commissioners collected €150m on land and property transactions and €195m on stocks and shares.

Financial Services Ireland director Brendan Bruen described the whole idea of the tax as political grandstanding.

“I think the recent developments in the German parliament are just political grandstanding. The FTT doesn’t make economic sense, even if introduced across all 27 member states, for Germany or for anyone else.”

ECB head Mario Draghi recently said a FTT would not be good for investment into Ireland.

“Many investors have left Europe. I am wondering if we will attract them with this tax.”

Mr Bruen said the argument that the tax might curb risky trading isn’t true, and that it is the consumer who would end up paying the tax.

He also couldn’t see any reason to interfere with the Irish Financial Services Centre, which he said contributes €2bn to the State.

“It would make no sense for Ireland to undermine the over €2bn that is paid in tax by the IFSC,” Mr Bruen said.