Tax contributions sufficient to fund EU’s overseas
aid budget for 12 years
21 September 2009
Hedge fund and private equity industries contribute €9bn
in tax revenues to the European Union governments, according to research
by the Alternative Investment Management Association (AIMA).
The research was conducted among AIMA members and those of the British
Private Equity and Venture Capital Association (BVCA) by independent think-tank
Open Europe. Open Europe commented that the €9bn in tax revenues
would be enough to fund the EU’s entire overseas aid budget over
a period of 12 years. The figure matches the value of the EU’s Cohesion
and Aid Programmes for Poland, and just falls short of the subsidy that
France receives each year under the EU’s Common Agricultural Policy.
The report said: “Alternative investment fund managers provide investments
and create growth, jobs and more efficient markets across Europe.”
The survey also showed that the UK hedge fund and private equity industries
contribute around €6.1bn in tax revenues to HMRC, which Open Europe
said is enough to pay for more than 200,000 nurses, 45,000 hospital consultants,
or 165,000 teachers. In just two years, these revenues generated by alternative
investment fund managers would be sufficient to pay for the entire 2012
London Olympics. However, were these tax revenues to disappear, Open Europe
said a 20 per cent increase in council tax would be required to make up
the shortfall.
Other findings included that while the AIFM
directive, although designed to give better protection for investors,
is favoured by just two per cent of alternative investment fund managers’
clients, while 46 per cent oppose it.
“Our surveys show that unless a range of amendments take place,
the AIFM directive will impose substantial costs across the board, without
offering sufficient benefits for the industry, investors and the wider
economy...in a worst0case scenario, thousands of jobs and millions in
tax revenues could be at stake,” said the report.
Andrew Baker, chief executive officer at AIMA, added: “We were delighted
to work with Open Europe on their survey of alternative investment fund
managers in Europe. Their findings prove that our industry makes a strong
and tangible contribution to the economies of Europe.”
The report is available here.
