The "Tobin Tax" seeks to impose a world wide tax on all foreign exchange transactions to reduce exchange rate volatility and to raise revenue to support international development.
While the motives of those seeking to impose such a tax are understandable there is some debate on the theoretical merits of the tax. However, as I have stated in replies to previous parliamentary questions on the matter, leaving aside the issues of theory associated with the proposal, there are still substantial practical difficulties in relation to the tax. These stem largely from enforcement problems. Global co-operation would be required for the tax to become workable. Otherwise, foreign exchange business would gravitate quickly to any country that did not enforce the tax. In this light, the probability of every country in the world applying such a tax, or of one country applying it unilaterally, must be open to question.