EU Tax Chief: UK Won't Stop Financial Transaction Tax

    BRUSSELS--The European Union's tax chief expressed confidence Tuesday that the U.K. would not succeed in derailing plans by 11 countries to introduce a tax on financial transactions.

    The British government took legal steps last month to block the tax, arguing it could affect banks from countries that haven't signed up for the levy, including the U.K. The tax would apply to trades by banks from the 11 European countries regardless of where the transaction actually takes place.

    "I'm confident that what we propose is technically sound, legally sound and there's no way to win against us," Tax Commissioner Algirdis Semeta told lawmakers at the European Parliament.

    He said the 11 countries that support the tax had demonstrated "strong unity." Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia have all signed up to the tax and other EU countries have the option to join.

    Britain is worried that the tax will hurt business at home--London is Europe's biggest financial hub--and damage an already weak euro zone economy. U.K. Chancellor George Osborne has also said it could hurt pensioners and ordinary people with savings accounts.

    The tax aims to discourage speculative trading and raise public funds, badly needed in some countries that had to rescue their banks in the aftermath of the 2008 financial crisis. Under the plan, transactions of shares, currencies and bonds would be taxed. The EU estimates the tax could raise upwards of EUR30 billion ($39 billion) a year.

    Britain is also concerned that it would have to collect the tax on behalf of other countries, but Mr. Semeta disputed that logic. "It's for participating states to introduce methods of tax collection," he said.

    Mr. Semeta acknowledged that there were still "various concerns" about the tax, with some governments wanting to exclude government bonds and pension funds. He said that final shape of the levy was "up to those 11 member states," which must separately approve the tax before it becomes law.

    --Write to Vanessa Mock at and Tom Fairless at