In Taiwan there is a FFT of 0.3% on equity sell, and coincidentally HFT seemed to be non-existent in Taiwan market. HFT features high volumes of trades, does the tax make HFT infeasible?
A lot of designated liquidity providers/market maker are exempt from FTT as authorities rightly believe markets would become less liquid without them.
So HFT trading firms just decide to call themselves market makers and do some arbitary liquidity providing role to give them a free pass to carry on with their other strategies tax free.
It is the normal investor, small trader that will feel the pain of a financial transaction tax.