LONDON, April 21, 2010 (AFP) – The International Monetary Fund has proposed two new global taxes on banks and other financial institutions to cover the cost of future bailouts, the BBC reported. The measures would see all institutions pay a bank levy as well as a further tax on profits and pay, which would aim to protect against future financial meltdown, said the broadcaster Tuesday, citing IMF documents.
Governments of the Group of 20 advanced and developing countries — which account for more than 85 percent of the global economy — received the documents Tuesday, said the BBC.
Finance ministers would discuss the proposals this weekend, it added.
Insurers, hedge funds and other financial institutions would also be required to pay the taxes under the IMF proposals, despite the fact they were less implicated in the recent financial crisis.
This was to prevent banks reclassifying activities they currently carry out as other services — such as insurance or hedge-fund services — in an effort to avoid the levy.
The general levy, called the “financial stability contribution,” would start at a flat rate but would eventually be changed so businesses judged to be riskier paid