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Bank and investor taxes to be slashed

Australia will buck the international trend towards higher taxes on banks and financial institutions and lower financial services taxes under new government proposals unveiled by Minister for Financial Services Chris Bowen on Friday.

Mr Bowen launched a report into making Australia a regional hub for financial services and increasing the nation’s exports of financial services saying Australia stands out as a safe haven for international investors.

The report recommends the removal of withholding tax on interest income earned by foreign banks in their Australian branches. The report also highlighted that tax law does not allow investors in a unit trust to gain a tax benefit from losses.

Other tax breaks and incentives for fund managers and banks were also suggested by the government commissioned report by former Macquarie Bank CEO Mark Johnson and Treasury officials.

Meanwhile US President Barrack Obama unveiled plans on Friday for a new punitive tax on the US banking system to collect almost $100 billion from institutions to recoup taxpayer money used to bail out banks during the global financial crisis.

Source: The Australian

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