‘The Financial Activities Tax’ and ‘Financial Stability Contribution’ were propsoed by G-20. The Interim Report of the G-20 on Fair and Substantial Contribution by the Financial Sector of April 2010 for ‘financial stability contribution’ proposed a flat rate levy on all financial institutions and ‘financial activities tax’ levied on profits and remuneration.
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Purpose of these taxes is to help pay for future financial clean-ups and reduce systemic risk by shrinking the size of the financial sector.
The proposal was recently discussed at the G-20 meeting at Busan,Republic of Korea in June 2010, which called for implementation of levy taking each nations ‘circumstance and options’. India’s view was that there was need for better and well placed regulation rather than imposing levy on bank balance sheets.