The European Fund and Asset Management Association says it is very concerned about the European Commission’s financial services tax proposals.

It considers that the policy reasons advanced by the Commission are seriously flawed in the case of the funds industry.

For example, there is no acknowledgement of the fact that the funds industry has not benefited from government support and would not expect to rely on state bailout as a safety net.

Moreover, taxing measures could have a significant impact in the context of individual investors’ retirement provisions.

Peter de Proft, director general of Efama, says: “Increased costs due to the introduction of a financial activities tax are likely to be passed on to the end consumer, the investor. This could result in unwanted distortion as regards the choice for small investors between direct investment in securities and investment through collective investment undertakings. This should be of concern to governments whose policies are to encourage investors to take responsibility for their own retirement provisions.”