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Balancing the Regulation and Taxation of Banking

Balancing the Regulation and Taxation of Banking

Author: Sajid Chaudhry; Andrew W. Mullineux; Natasha Agarwal
Publisher: Edward Elgar Publishing
ISBN: 9781785360268
Published In: August 2015
Format: Hardback , 168 pages
Jurisdiction: International ? Disclaimer:
Countri(es) stated herein are used as reference only

List Price: HKD 1,092.00

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Description
Contents

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This concise book gives a unique overview of bank taxation as an alternative or a compliment to prudential regulation or non-revenue taxation. Existing bank taxation is reviewed with a view to eliminating distortions in the tax system, which have incentivized banks to engage in risky activities in the past.

The authors analyse the taxation of financial instruments trading, as well as the taxation of banking products and services to gauge whether this could finance resolution mechanisms and also help to ensure the stability of banks. In this respect, the authors put forward several arguments.

Firstly, they contend that a financial transaction tax is economically inefficient, potentially costly for the economy, but if set at an approximately low rate may be used to assure banks make a 'true and fair contribution' to their implicit insurance by taxpayers. Secondly, they show that a bank levy used to finance deposit guarantee and bank resolution mechanisms is potentially useful for financial stability, but that it poses the threat of double taxation, together with the proposed Basel III liquidity ratios.

Thirdly, the authors argue in favour of the elimination of exemption from value added tax (VAT) for financial services in order to provide banks with a level playing field, whilst retaining exemption for basic payment services that are infrastructural. This is expected to improve efficiency by reducing the wasteful use of financial services.

This book is an invaluable resource to students, academics and researchers in the fields of banking regulation and taxation. Policymakers and those with a wider interest in the issues will find it both topical and enlightening.

1. Introduction
2. Regulation and Taxation
3. Some Lessons from the Global (or Great) Financial Crisis (GFC)
4. Fiscal Costs of the Global Financial Crisis
5. An Overview of Existing Taxation
6. Taxation of Financial Instruments
7. Conclusion and Policy Recommendations References Index