What is the difference between a Financial Transaction Tax (FTT) and a Currency Transaction Levy (CTL)?
The proposal for a Financial Transaction Tax that recently hit the headlines is a broad levy applied to various categories of financial transactions including: stocks, bonds and currency. Its motivation is to both regulate the market and produce revenue. The proposed rate is 0.05%. Crucially, it would require universal participation in order to work. And its projected revenue has been estimated to be US$600-700 billion a year if implemented on a global basis. A Currency Transaction Levy is a type of FTT that applies only to the currency market – the largest market in the world. The proposed rate of 0.005% would raise more than US$30 billion a year if applied to all four major currencies (dollar, euro, sterling & yen). Crucially, it could be implemented unilaterally and so would not need global consensus. (For more information click here).
