Tax on cross border capital flow

Pettifor advocacy

Challenges to Implementation
Tricky flows: Corporate bond issuance through foreign subsidiaries boosts foreign direct investment by using the mechanism of intercompany loans. "A recent International Monetary Fund (IMF) report, which has pointed out that “intercompany loans accounted for some 60 percent of total FDI [Foreign direct investment] in 2014." ===Example implementations === ===Brazil === Brazil uses a tax on international capital flows counter-cyclically - the tax is raised during capital inflow surges and reduced during capital outflow periods.

The Brazilian Executive Branch on May 2, 2016, issued Decree 8,731/2016 (decree), which amends the tax on financial transactions (IOF) regulations related to certain foreign-exchange transactions and repurchase agreements held by financial institutions. The decree increases the IOF tax rate from 0.38% to 1.1% with respect to foreign-exchange transactions involving the purchase of foreign currency, such as US Dollars, in cash and settled on or after May 3, 2016. (Source)

Motivations for changes :""We only react when we aren't together with the others," Mr. Mendes said. "If we're moving in step with the other currencies of the world, there's not reason to enter the market." (WSJ 2013-06-05)