A FAT lot of good that'll do the banks
In the red corner, the EC has thrown its weight behind the idea of hitting EU-based banks with taxes, not only on their transactions, but on their activities to boot.
In the blue corner, the CBI has come out in criticism of the European mandarins because the costs will ultimately be shouldered by businesses and banking customers, it says.
A proposed tax rise is never going to be popular with business groups, but perhaps the more pressing issue is quite how the tax is going to be collected.
In fact, which tax authority is going to lay claim to the tax generated by a financial institution based in the UK for example, which does hundreds of thousands of transactions a day- not only between its own banks in other countries, but also other financial institutions?
The potential for a tug-of war over taxes between different tax authorities under strict orders to bring in as much tax as possible while the global economy remains shaky is very real….