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  • Tobin Tax: MPK Inggris - E

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    This document discusses Tobin Tax, which is a tax on foreign exchange transactions intended to reduce short-term currency speculation. It provides background on Tobin Tax, including that it was originally proposed by economist James Tobin in 1972. It also discusses the potential pros and cons of Tobin Tax, such as reducing currency instability but potentially slowing economic growth. Several countries that implemented Tobin Tax, such as Sweden and Italy, are mentioned. The document concludes that while Tobin Tax could reduce hot money flows in theory, Indonesia's economy currently relies too heavily on foreign investment to implement it, so a Reverse Tobin Tax with incentives for long-term foreign investment would be a better policy option.

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    This document discusses Tobin Tax, which is a tax on foreign exchange transactions intended to reduce short-term currency speculation. It provides background on Tobin Tax, including that it was originally proposed by economist James Tobin in 1972. It also discusses the potential pros and cons of Tobin Tax, such as reducing currency instability but potentially slowing economic growth. Several countries that implemented Tobin Tax, such as Sweden and Italy, are mentioned. The document concludes that while Tobin Tax could reduce hot money flows in theory, Indonesia's economy currently relies too heavily on foreign investment to implement it, so a Reverse Tobin Tax with incentives for long-term foreign investment would be a better policy option.

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    14 views17 pages

    Tobin Tax: MPK Inggris - E

    Uploaded by

    farah afifah
    This document discusses Tobin Tax, which is a tax on foreign exchange transactions intended to reduce short-term currency speculation. It provides background on Tobin Tax, including that it was originally proposed by economist James Tobin in 1972. It also discusses the potential pros and cons of Tobin Tax, such as reducing currency instability but potentially slowing economic growth. Several countries that implemented Tobin Tax, such as Sweden and Italy, are mentioned. The document concludes that while Tobin Tax could reduce hot money flows in theory, Indonesia's economy currently relies too heavily on foreign investment to implement it, so a Reverse Tobin Tax with incentives for long-term foreign investment would be a better policy option.

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    of 17

    MPK INGGRIS - E

    TOBIN TAX
    FARAH AFIFAH (1806212904)
    NADYEZDA RIFA (1806183892)
    AFIYA KHAIRUNNISA (1806143775)
    We did some reseach
    We did a little
    survey
    With just two yes or no question filled by
    FEB UI students

    ➔ 1st question
    Do you know what Tobin
    Tax is?

    ➔ 2nd question
    Shoud it implemented in Indonesia?
    DEFINITION

    PROS AND CONS


    And countries that have
    implemented it

    IF APPLIED IN

    OUTLINE INDONESIA
    HOT MONEY?
    Short-term Currency that moves regularly, and quickly, between
    financial markets so investors ensure they are getting the
    highest short term interest rates available.
    Exampl
    e : FP I (
    Portfoli Foreign
    o Inves
    tment)
    .
    FOREIGN PORTFOLIO
    INVESTMENTS

    The entry of funds into a country where


    foreigners deposit money in a country’s
    bank or make purchases in the country’s
    stock and bonds market
    How could Hot Money
    Affect a nation’s
    economy?
    Hot money flows can destabilize a nation’s economy. A rapid rise
    in the currency can harm a countries exports because exports
    become more expensive.

    Hot money flows can create excess liquidity fuelling a future


    asset boom and creating more long-term problems.
    What is Tobin
    Tax?
    Tobin tax is a tax imposed on
    foreign currency or foreign
    exchange transactions as a means
    of controlling the stability of a
    given country's currency.

    ➔ The Tobin tax proposed with the


    intention of Penalizing short-term
    currency speculation.
    ➔ Tobin tax main concern is Hot
    Money
    James Tobin
    ➔ The Tobin tax was originally (1918-2002)
    introduced by an American economist
    James Tobin in 1972
    The Pros and Cons of Tobin Tax
    The Tobin tax has been controversial since its introduction.

    Pros Cons

    ➔ huge money-raiser for ➔ fewer financial


    governments transactions being made
    increase stability currency ➔ slowing global economic
    and interest rates growth and development in
    the long run
    Countries that implemented Tobin Tax

    Sweden in 1984 Italy in 2013


    The results were disappointing. Italy adopted the Tobin tax not
    Capital gains tax revenues fell and the
    because it was faced with exchange
    impact on market trading was also rate instability, but because it was
    more dramatic. facing a debt crisis, an uncompetitive
    In 1991, the tax was scrapped. economy, and a weak banking sector.
    .... EU members requesting to participate
    .... EU members not participating
    Countries that implemented
    Tobin Tax
    1 January 2014

    The European Union financial


    transaction tax (EU FTT) is a
    proposal made by the European
    Commission to introduce a
    financial transaction tax (FTT)

    2
    0
    2014 1 1
    January 6 October
    2016 2016
    Postponed for 2 The European
    years Commission was
    instructed to draft
    the tax
    The Minister of Finance claimed that she is
    reviewing the concept of tobin tax if to be applied
    in Indonesia. But many arguments arise.
    FOREIGN PORTFOLIO INVESTMENT IN
    INDONESIA:

    US$ 11,47
    Per December 2018

    billion
    the platform is Surat Utang Negara (SUN) and
    Sertifikat Bank Indonesia (SBI) which promise a
    large return
    THEN WHAT POLICY
    MATCHES US BEST?
    REVERSE TOBIN TAX!
    CONCLUSION
    Theoritically, Tobin Tax is indeed a right way to reduce the flow of hot
    money so that it is not free to go out or enter. But Indonesia is not yet
    ready to implement this policy because most investments here still
    come from foreign investors. Therefore, we can use Reverse Tobin Tax
    which gives out incentives for foreign investors to make a long-term
    investment
    THANK
    YOU
    Any Question?
    Sources :
    https://www.investopedia.com/terms/t/tobin-tax.asp
    https://nasional.kontan.co.id/news/kebijakan-reverse-tobin-tax-masih-dalam-proses-pengkajian
    https://nasional.kontan.co.id/news/cegah-dana-asing-keluar-tobin-tax-diusulkan
    http://oecdobserver.org/news/archivestory.php/aid/664/Tobin_tax:_could_it_work__.html
    https://nasional.kontan.co.id/news/tobin-tax-belum-cocok-untuk-pasar-indonesia
    http://en.rfi.fr/economy/20140506-11-eu-states-implement-tobin-tax-january-2016
    https://www.bbc.com/news/business-15552412
    https://www.austriancenter.com/the-eus-failed-financial-tax-good-and-bad-news/
    https://knowledge.wharton.upenn.edu/article/france-adopts-the-tobin-tax-will-other-eu-countries-follow/
    https://www.cnnindonesia.com/ekonomi/20190109075835-532-359454/pemerintah-rancang-konsep-tobin-ta
    x-pajak-untuk-modal-asing

    https://www.cnbcindonesia.com/opini/20180816200235-14-29048/depresiasi-rupiah-dan-relevansi-tobin-tax

    https://beritagar.id/artikel/berita/mengenal-pajak-tobin-untuk-lalu-lintas-modal-asing-di-indonesia

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