Bank Levy Will Now Apply to Global Balance Sheets
A new legislation was released by Government regarding the tax. This legislation is going to be introduced from next year. This draft legislation was passed today and it will apply to all the balance sheets of UK banks and all the operations of UK in the overseas institutions. This legislation is supposed to be final.
The financial secretary of the Treasury while talking to the media said that the levy which is going to be introduced and implemented in January will help a lot and will raise around £2.5bn every year starting from 2012. This levy is also designed to encourage the less risk funding.
The final draft legislation will be released or published in the final months of the years and the rate of levy will be mentioned in the legislation. Many people are raising questions about this legislation.
The financial secretary also mentioned that the final scheme actually design incentives for all the banks and will let them make more use of stable financial sources for example long term loans and equity. There is no doubt that this legislation will help the banks in some way and will also help Government a lot.
One of the questions was raised by the British Bankers’ Association. The question was “Questions are being raised about how the UK is proposing to apply tax to a global balance sheet. The Treasury’s statement is largely silent on how this levy would interact with taxation in other countries.’”
There are more words expected to come from the financial secretary and hopefully there will be more questions raised about this legislation. Most of the questions are expected to come from Banks who are actually concerned about this legislation.