As part of its response to the Financial System Inquiry, the government announced a potential levy on major banks with liabilities greater than $100 billion in the budget last night. The levy would raise $6.2 billion over four years which would be used to support budget repair.
The bank levy was Scott Morrison’s “rabbit out of the hat” according to Michael Croker, head of tax at Chartered Accountants ANZ.
“Although carefully crafted to appear benign to average Australians, the levy raises many questions: ascertaining which liabilities are in scope, territorial issues, quarterly reporting obligations, competitive issues, and importantly, who actually bears the burden of the tax?” Mr Croker questioned.
“Early days yet, but the banks may well argue the tax could do more harm than good to financial markets and raise less revenue than the Treasurer hopes.”
Speaking to Accountants Daily, BDO national tax director Lance Cunningham said that the bank levy won’t have a major impact on accountants or their clients.
“The levy on bank accounts is not going to affect your usual individual or business bank accounts. It’s a much higher level type of account that it will be on,” Mr Cunningham said.
“The banks may want to push it down into fees and charges for all their clients, so that might have some flow on effect, but the banks are then going to have to compete with smaller operators that won't have those charges so it's going to be interesting to see how that all plays out."