GERMAN BOURSE TURNOVER TAX DECISION ANGERS BANKS
The failure of the West German government
to abolish a tax on bourse turnover when other taxes came under
discussion during recent coalition negotiations was a "bitter
disappointment," the president of the West German Federation of
Banks, Hanns Christian Schroeder-Hohenwarth, said.
    Schroeder-Hohenwarth told a news conference that, contrary
to numerous assurances from the government, the abolition of
the turnover tax had not been touched upon.
    "This must not be allowed to be the last word. Otherwise a
major chance for West Germany as a financial centre will have
been missed," he said.
    After the January 25 election the government decided upon a
reform of the West German tax system, involving gross tax cuts
of 44 billion marks, which would be implemented in 1990.
    In line with a pledge made by Bonn at the February monetary
conference in Paris, the government said earlier this month
part of the planned tax cuts would be effective next year.
    Government sources have said the fact the latest coalition
discussions did not touch upon the bourse turnover tax does not
necessarily rule out the possibility that it could be abolished
later in the current four-year legislative period.
    The bourse turnover tax, levied on securities trades where
an end-investor is involved, generated government revenue of
some 750 mln marks in 1986, according to the Finance Ministry.
    Schroeder-Hohenwarth said there were no fiscal reasons for
maintaining the tax because companies would benefit from its
abolition. Their earnings would increase and the government
would receive more in profits tax.
    Wolfgang Roeller, chief executive of Dresdner Bank AG, said
the bourse tax decision did not fit into the general background
of liberalisation of the German capital market, and represented
a weakening of West Germany as a financial centre.
 REUTER
