The debate on financial transaction tax (FTT) has once again been revived with French President, Nicolas Sarkozy’s recent announcement to introduce the same in the nation’s economy in August this year. Although seen by many as an election gimmick, the 0.1% tax that will be applicable to the purchase of shares of companies is estimated to generate a new income of about one billion Euros ($1.3bn, £0.8bn) for the government, and thus reduce the French budget deficit. According to President Sarkozy, introducing the FTT in France will help to tax those responsible for the financial crisis of 2008 to restore the finances and will create an example for other European states to follow suit.
While the proposition of FTT in France initially and pan-Europe subsequently is receiving support from some and flak from others and is being deliberated upon, if imposed it would be a much awaited move towards global FTT as was campaigned for by the civil society in 2010. Also known as Robin Hood Tax, the global FTT is a levy on all transactions in the global financial system, such as foreign exchange, derivatives trading and share deals. The global campaign known as “Make finance work for people and the planet” advocated for the establishment of a global FTT as part of the corporate social responsibility of the global financial services sector and pointed out that such a tax could contribute towards preventing cuts in public spending especially with regard to education and health facilities, address poverty and help to fight pressing issues faced in the several developing economies. It stated that a global FTT as little as 0.005 percent has the potential to raise $40 billion every year that can be channelled to provide basic social protection and social services to millions across the world.
The need for imposition of the global FTT in the present times in which we are still facing the lingering effects of the financial crisis cannot be underestimated. Faced with pressures on the national budgets, donor states are reducing funding to the countries of the global south. This is not a good and encouraging sign with less than 3 years left for target period set for the attainment of the United Nation’s Millennium Development Goals, over 215 million child labourers across the globe working in deplorable and hazardous conditions and 67 million children out of school and deprived of their fundamental right to education. There is a need to mobilise large amount of resources and channelise them into policy implementation and project actions to make poverty and child labour a thing of the past.
Global March Against Child Labour participates in and supports the campaign for global FTT. In 2010, it had solicited support of members and partners of its worldwide network for the campaign. Global March sees the move towards the levy of FTT in France, followed by Europe as a welcome step and a precursor for imposition of a global FTT. According to Global March, the current hullaballoo over imposition of FTT to mitigate the Euro-zone debt crisis will re-place global FTT in policy debates and agendas, and reposition its importance for directing tax towards meeting the pressing developmental needs, especially of Sub-Saharan Africa, South Asia and Latin America. Progressive policies on taxations, like the FTT and pay-as-you-earn, will raise the money to provide all needy people with a basic income, healthcare, education and housing, prevent child labour and exploitation.