"Such a tax, unless it is introduced all over Europe, creates market distortions. Companies will be able to choose neighboring countries, retreating from the Lithuanian market and the Lithuanian bourse," Gerda Žigienė, the director of the LFRI, said at a news conference.
The institute says that there are no estimates to show that the tax would be beneficial. For example, following the introduction of such a tax in Sweden in 1984, around half of transactions were moved to London Stock Exchange.
"Another effect (would be) increased borrowing costs for the state itself. With the introduction of this transaction tax, liquidity in the market would decline," said Andrius Nacajus, head of DNB Markets for the Baltic countries.
The tax would increase the government's spending on borrowing in the market by between 30 million and 50 million litas (EUR 8.7-14.5m), he said.
Lithuania has postponed plans to introduce a financial transaction tax.
