Banks are taxed

Britain put an additional two billion pound yearly tax on its banks Tuesday, with France and Germany stating that they will soon follow suit as an effort to tell the banking industry it must take responsibility for its role in the financial crisis.

The tax was still less harsh however than predictions, which adds to the evidence that leading economies will impose levies that are similar to cap the government’s scale of steps. The day after the announcement British banking shares decreased but increased again on the day that British financial minister George Osborne spoke.

Osborne stated that the crisis began within the banking sector and the bank failures slowly cost the rest of the UK society.  Therefore, he said it is only right that banks should contribute to the economy due to the risks that they impose.

Britain, France, and Germany issued a statement together that they would all enforce bank levies in an effort to make sure that none of the countries is at a disadvantage.

France will release details of its tax levies in its next Budget announcement and Germany will introduce draft legislation during the summer.

Analyst at Matrix, Andrew Lim, stated that now that there is some clarity surrounding the economic crisis, they are aware it’s only two billion pounds which is not as bad as it could have been.

Detailed forecasts from the Treasury show that the levy should raise about 1.2b pounds in the 2011/2012 fiscal year and an additional 2.5b pounds in the 2013/2014 fiscal year.