FINANCIAL SERVICES
Government "actively looking" at tax on bank bonuses
The government is considering the introduction of a permanent tax on the pay and profits of banks, according to City minister Mark Hoban MP. He also urged the banks to reform their pay practices and “make amends with the public”.
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Writing in The Guardian newspaper, Hoban said: “A key way of regaining public trust will be reforming the system of remuneration as agreed by the G20. Banks globally have the opportunity to send a clear message to the public that the banking system now operates in a way that is fair and stable, and no longer rewards employees based on short-term performance while leaving investors and taxpayers exposed to the long-term risks. They must reform remuneration to demonstrate this. “
He added: “But there is a role for the government too. I can announce that we will consult on a remuneration disclosure regime in the financial services sector. We are actively looking at the introduction of a financial activities tax and will explore the costs and benefits of such a tax on profits and remuneration. We are also asking the Financial Services Authority to examine further options in the forthcoming review of its remuneration code.”
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Title: “We'll tax the banks”, by Mark Hoban, The Guardian, 13 July 2010.
Availability: You can read the article online at www.guardian.co.uk/commentisfree/2010/jul/12/tax-the-banks-mark-hoban.