TAX NEWS - JUNE 2010

No consensus on universal bank tax

Universal Bank Tax

The G-20 nations confirmed an earlier report from The Korea Times that they are not going to pursuit a global, universal bank tax system anymore on the financial industry.

After the Busan meeting of finance ministers and central bank governors, the nations said that each of them will make its own decision on universal bank tax.

The Korea Times first reported on Thursday that G-20 is giving up on the universal bank tax scheme, citing Shin Hyun-song, the architect of Korea's G-20 initiative.

"It was apparent again from today's meetings that most G20 members do not support the concept of a universal bank tax," Canadian Finande Minister Jim Flaherty said during a news conference, Saturday.

Korean Finance Minister Yoon Jeung-hyun, the host of the Busan G-20 confab, and British Chancellor of Exchequer George Osborne echoed this view.

"Some countries had financial crisis, and others did not. Because of the different environment, detailed plans can differ by nation," Yoon said.

"Different countries need different approaches," said Osborne during a news conference, adding that they will be allowed to make their own policies as long as they are under the "umbrella of G-20"framework.

The communique, issued after the meeting, only made a brief reference, saying that the financial sector should make a "fair and substantial contribution" towards any future state rescue deal.

A senior official at Korea's financial ministry said on Friday that universal bank tax won't be included in the agenda at Toronto summit, June 26-27.