G-20 Says No To Bank Taxes & Secrecy By TII News Service
Jun 28, 2010 , Toronto
THE group of G-20 countries is against imposition of a bank tax as it would lead to a migration of businesses, according to the Organisation for Economic Cooperation and Development (OECD).
Countries including UK, Germany and France proposed an increase in bank taxes to pay for government spending during the financial crisis that came about partly due to the excessive risks taken by financial institutions. The crisis had impacted financial institutions in the industrialized nations more than the developing ones.
Countries, mostly emerging economies, severely opposed any hike in bank taxes. According to Kremlin economic aide Arkady Dvorkovich, the Russian banking sector would benefit if other countries imposed a bank tax. Russia was against being asked to pay for the financial problems of other governments.
Jeffrey Owens of the OECD suggested that there was need to review the taxes paid by the banking sector, which inevitably paid less than other sectors due to the opportunities it had to reduce effective tax rates.
OECD also expected G-20 leaders to recommit to tackling tax havens at the Summit in Toronto stressing that the financial sector should compete on services provided rather than on the basis of secrecy that certain countries may offer.
