The World Federation of Exchanges (WFE), the global industry association for exchanges and clearing houses, has published a paper promoting a future-ready tax system to incentivise investment for the benefit of market participants, investors, issuers and the real economy.
The paper outlines a comprehensive blueprint for modernising tax policy to encourage productive investment, support long-term savings, and enhance global competitiveness. It calls on governments to eliminate harmful levies, simplify reporting requirements, and create a more welcoming environment for investors and issuers alike.
Key Recommendations Include:
- Provide Tax Relief for Investors: Tax incentives for pension savings and retail investment accounts, as well as reducing withholding taxes on dividends, can boost long-term savings, support equity investment, and promote financial inclusion.
- Eliminate Taxes on Listings: Removing levies on public listings makes it more affordable for companies - especially SMEs - to access public markets. Tax incentives for first-time listings and deductions for listing and IPO-related expenses can stimulate new issuance and capital raising.
- Incentivise Clearing: Some jurisdictions tax clearing. Taxes on clearing activities undermine financial stability and deter central clearing - an internationally recognised risk-mitigation tool. Ensuring tax neutrality between cleared and non-cleared trades supports safe and efficient markets.
- Simplify Tax Reporting: Complex and inconsistent tax requirements discourage investment, particularly cross-border. Automation, clear guidance, and exemptions for small investors can reduce compliance burdens and expand participation.
- Remove Cross-Border Tax Barriers: Harmonising reporting requirements, strengthening double taxation treaties, and aligning treatment of domestic and foreign investors can boost global investment flows, particularly to emerging markets.
- Eliminate Financial Transaction Taxes (FTTs): On top of all this, there is the important question of FTTs which increase trading costs, reduce liquidity, and deter both investment and issuance, harming market efficiency and ultimately failing to achieve their intended policy outcomes.
Nandini Sukumar, CEO of the WFE, said, “Capital markets are engines of innovation, job creation, and prosperity, but poorly designed tax regimes are holding them back. We are calling on governments to take bold, coordinated action to remove these barriers to unlock the potential of global markets. The reforms we suggest will help channel more capital into the real economy, supporting business expansion and infrastructure investment, while making markets more inclusive and accessible. By reducing friction and incentivising participation, we can help capital markets better serve society.”
Richard Metcalfe, Head of Regulatory Affairs at the WFE, said, “An excessive tax burden is a major factor behind the decline in public listings. We’ve consistently urged regulators to act decisively to reverse this trend. Reforming outdated and counterproductive tax systems is an effective way policymakers can encourage companies to list and foster a vibrant, risk-reward investment culture.
Read the full paper here.
