Britain to publish bank tax legislation

20th October 2010, Comments 0 comments

A law that would create a bank tax in Britain raising billions of pounds a year will be published Thursday, the finance minister said, as he unveiled plans to tackle a record budget deficit.

George Osborne said the coalition government's aim was to "extract the maximum sustainable tax revenues from financial services."

It is thought the permanent levy could raise up to 2.5 billion pounds (2.8 billion euros, 4.0 billion dollars) a year.

Plans for the levy were first announced in June's emergency budget in a joint move with France and Germany.

"We neither want to let banks off making their fair contribution, nor do we want to drive them abroad," Osborne said as he unveiled a spending review featuring average cuts of a fifth in most government departments.

Even if the legislation is passed by parliament, it is unlikely to become law before next year.

Prime Minister David Cameron's coalition has pledged to crack down on the activities of bankers, who it blames for helping to cause the global financial crisis in 2008.

It is shaking up the way they are regulated, handing responsibility to this for the Bank of England, despite warnings from some experts that this risks driving City of London wealth-creators abroad.

Osborne also said he wanted to force banks to sign up to a code of practice which aims to crack down on tax avoidance.

Only four out of 15 leading banks have so far signed up to this but Osborne wants them all to comply by the end of November.

© 2010 AFP

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