The OECD said the costs of the "Tobin" tax on currency transactions could outweigh its potential benefits.
In a study to be published in its forthcoming Economic Outlook, the OECD acknowledged concern that currency trading can be volatile and disruptive, which prompted calls for a levy on each transaction.
However, the OECD study concluded that "such a tax would not necessarily reduce volatility. Its costs are also likely to outweigh benefits."
With around $1.25 trillion traded daily on currency markets, the potential revenue of the proposed tax is large, but not as great as some advocates claim as the tax base itself is likely to fall significantly if it is introduced, the OECD said.
"Looking at a number of markets where transaction charges have been imposed, the study concludes that the effect on volatility is at best mixed," it said.
"In some cases, there was no appreciable reduction; in others, volatility actually rose," it said.
Implementation of a Tobin tax would be difficult, and unless it is applied on a worldwide basis, it would be unlikely to be effective, the OECD said.
The levy would also have to cover other traded financial instruments and even some commodity markets as these could be used to avoid the tax, it said.
PA