A visiting international tax expert has questioned why Australia is proposing a levy on its major banks, warning it will come at a cost to customers, shareholders and bank employees.
Chas Roy-Chowdhury, head of taxation at the global Association of Chartered Certified Accountants, says if the federal government wanted banks to pay for any potential bail-out provision, why didn't it do it during the global financial crisis.
In any case, he believes such a levy should be broad-based rather than narrowly based on five major banks and should have a time limit, as it does in the UK and US.
"It is something that should 't be there for all time as a pure tax-raising measure," he told AAP on Thursday.
"It's not good for Australia having a tax for taxes sake."
Mr Roy-Chowdhury says the levy was also a cost to the banks which will be passed on as higher bank charges, lower wages for bank employees or lower dividends for shareholders, which affects pensions.
"It's not a cost-free option as the politicians seem to think," he said.
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