A financial taxation is a specific type of monetary transaction for a particular purpose. This concept has been most commonly associated with the financial sector. In this presentation, I have listed some useful concepts of FINANCIAL Taxation. which can help an individual enhance his skills in taxation.
2. Financial Transaction Taxes are levies imposed on particular
kinds of monetary transactions meant for a specific
purpose.
The nature of these taxes is important to understand as their
scope does not lie with financial institutions, rather their scope
lies with particular types of financial transactions that have
been designated as being taxable. Also, the tax can only be
levied once on a single transaction and so any financial
institution engaging in the transaction would have to pay the
tax only once.
3. Therefore, financial transaction taxes are distinct from
financial activities taxes and bank taxes.
It is important understand the distinction between these types
of taxes as this will enable one to understand how and why
financial transaction taxes are used as tools to for selective
discouragement of certain financial activities like excessive
speculation while not impacting other financial market
activities.
While all financial transaction taxes are devised and
implemented with a specific purpose in mind.
4. There are certain features that permeate all FTT’s. They are:
Reducing Market Volatility
Fairer and More Equitable Tax Collection
More Difficult to Evade Tax than in Alternatives
Reducing Market Volatility
Excessive market speculation can often lead to volatile market
situations and in certain cases usher in a marked decline or fall in
market value or operations.
Keynes, who first proposed FTT’s saw such financial taxes to be a
measure using which intense market speculation may be curbed
and enterprises be saved from the negative effects of such
speculations.
5. Naturally, the effect of excessive speculation would also affect the
investors associated with an enterprise.
So, by extension these taxes also protect the investors.
Fairer and More Equitable Tax Collection:
The tax collection regime of nations is built around having a
welfare oriented system where greater income leads to greater
taxes.
Financial transaction taxes and their many broader versions
provide a taxation base by which regulation of taxation regimes
can be done with more fairness and
equity.
6. The premise for this assertion is that the wealthy segments of
society engage most often in financial transactions of large
amounts.
More Difficult to Evade Tax than in Alternatives
FTT’s are considered to be harder to evade or avoid than other
forms of taxes in the domain of finance. Automated taxation
systems make FTT’s even more effective and in many cases
more efficient than former taxation
system.
7. For more information about
FINANCIAL TAXATION
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