Vol. 507 No. 1
27 Mr. Gilmore asked the Minister for Finance if his attention has been drawn to proposals made by a company (details supplied) and others for the introduction of a Tobin tax on financial transactions; and if he will make a statement on the matter. [16124/99]
I am aware of the proposals for the introduction of a Tobin tax which have been made by the association referred to by the Deputy in his question. 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 one can acknowledge the motives of those seeking to impose such a tax, the majority of expert opinion appears to be that the proposed tax suffers from severe pragmatic flaws, primarily due to enforcement problems. Whatever the theoretical merits of the tax, and there is some debate on that, a Tobin tax would require global co-operation. 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.
