The European Commission's proposed Tobin tax on financial transactions could fail to raise any additional revenue for the UK, chancellor George Osborne has warned in a letter to Treasury Select Committee chairman Andrew Tyrie MP.
Osborne (pictured) warns that any revenue would be offset by losses in revenue from other taxes, including £3 billion per year in lost stamp duty.
Osborne said he would expect a reduction in corporation tax due to the impact of the financial transaction tax (FTT) on the financial services sector.
‘Overall, it is possible that the tax might raise no additional money at all for the Exchequer,’ said Osborne.
He added it was difficult to estimate the impact of a euro-area only FTT.