Along with loads of responses towards global economic crisis and climate changing implications, bulks of proposals for global taxes have also ushered in. Global taxes on banks as well as all financial institutions; tax on specific international monetary transactions as well as on carbon for energy usage are some of the major proposals. Owing to the unpleasant consequences of the Asian Financial Crisis, the G20 instructed the International Monetary Fund to give suggestions whether tax should be levied on financial institutions as well as financial transactions.
After discussions, it was inferred that the primary objectives of taxes on financial institutions as well as transactions will be to recuperate the monetary expenses in order to bring out banks from financial crisis and also create a fund to handle such critical situations in future. Another purpose was to restrict speculative activities witnessed in financial transactions.
On the other hand, the sole purpose of carbon taxes was to bring into consideration environmental destruction using various energy sources with huge carbon content as well as to finance energy sources that are renewable.
Now, there are certain aspects depending on which the global tax would require an agreement:
- Purpose of the tax – Whether taxes will be levied on banks only or all on other financial institutions, and whether global taxes would be applicable solely on fossil fuels or on all energy sources?
- Tax base to be defined – Should bank assets or liabilities be taxed? Now, if any one of the options is chosen, what should be excluded?
- Tax collection format – What are the bodies to be provided statutory in order to obtain the global taxes?
If you wish, you can also attend online global tax seminars to have a better understanding of various tax implications.