Switerland's Merz Rejects Bank Tax

by Ulrika Lomas, Tax-News.com, Brussels

28 April 2010

During the recent International Monetary Fund (IMF) meeting in Washington, Switzerland’s Finance Minister Hans-Rudolf Merz confirmed Switzerland’s opposition to the idea of a bank tax.

Adding fuel to the fire, given the current lack of unity within the G20 on a bank levy designed to make financial institutions contribute to the cost of the crisis, Merz emphasized that the burden on the financial sector should not be increased.

According to Merz, in order to achieve financial stability and to avoid future economic crises, other measures must be taken. Merz expressed his belief that financial sector reform must be addressed, that capital flows into new markets must be controlled and that the increasing debt of many countries must be brought under control.

Merz noted that, while many proposals had indeed been put forward, an agreement had still not been reached on key issues such as, for example, how the financial markets should be better regulated, how monetary and fiscal policy should be led, how export trade should be regulated and how a fund should be set up to prevent future crises.

Merz pointed out that every country has experienced the crisis in a unique way and has therefore drawn its own conclusions from it. Alluding to the fact that UBS has repaid Swiss taxpayers’ money – plus CHF1.5bn (EUR1.04bn) in addition – Merz underlined the fact that Switzerland’s situation is therefore very different to that of other countries where state capital remains in bailed-out banks.

US Treasury Secretary Tim Geithner made clear during the IMF meeting that in the absence of a G20 agreement, America would press ahead with its own plans for a bank levy. Germany, the UK and France are also staunchly in favour of a bank tax.

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