The economic cost of a financial transaction tax (FTT) on financial institutions could be borne by end consumers, with the tax having a considerable impact on their long-term savings, the European Fund and Asset Management Association (EFAMA) has warned.

Despite the European Commission having previously stated that the tax could raise approximately €57bn every year, EFAMA emphasised that an FTT could have a serious impact on the funds sector of the long term savings market due to multiple taxation. For investment funds, the charge to financial transaction tax would apply on both transactions in portfolios and on transactions in fund units.

EFAMA director general Peter de Proft said that impact of an FTT on long term savings would mean “citizens having to save a larger part of their earnings, retire at a later age, or face a significantly reduced pension in retirement.”

Further adding to the weight of the argument against the FTT, the EFAMA added that there is “no guarantee that the proposed financial transaction tax would result in significant net revenues” because of a “dampening of end –user appetite for transactions.”

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