Taxes

New Tax Seen Crippling Italy's Financial Markets

Think of it as slow-motion economic suicide

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Trading of shares in Italy could fall by 30 percent and that of derivative products by 80 percent as a result of a new tax on financial transactions Rome plans to introduce next year, according to a bill due to go before parliament this week.

Italy was one of 11 euro zone countries that agreed earlier this month to go ahead with the tax and could now become one of the first states in the bloc to actually implement it. France introduced a trading levy in August.

The Italian bill, which will start its journey in parliament on Tuesday, estimates proceeds from the tax will be 1.09 billion euros a year, with a tax rate of 0.05 percent for transactions on shares and derivatives. The new levy will come into force on Jan.1, 2013.

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