A bank transaction tax is a tax levied on debit (and/or credit) entries on bank accounts. It can be automatically collected by a central counterparty in the clearing or settlement process.
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Australian bank account debits tax
Australia charged a tax on customer withdrawals from bank accounts with a cheque facility (both withdrawals made by cheque or by another means, such as EFTPOS).
The tax was introduced by the federal government in 1982. The power to levy the tax was transferred to the states in 1990, except for Norfolk Island which did not charge it. The tax was abolished by the states on dates between 1 July 2002 and 1 July 2005 as part of the package of reforms for the introduction of the goods and services tax.
Latin America
As globalization eroded the efficiency of conventional taxes such as value added taxes, various Latin American countries applied new taxation levied on bank transactions. Argentina introduced a bank transaction tax in 1984 before it was abolished in 1992.
In 1993 Brazil implemented a temporary "CPMF" tax at a rate between 0.25% and 0.38% to fund its health system. The tax lasted until 2007. In 2011, during the presidential election, there was renewed discussion about a possible re-introduction of the CPMF under the name "Social contribution for health" (CSS).
The broad based tax levied on all debit (and/or credit) entries on bank accounts proved to be evasion-proof, more efficient and less costly than orthodox tax models. Furthermore, the significant revenue-raising capacity of bank transactions taxation revived the centuries-old ideal of the Single Tax.
Technical feasibility
According to a study published in January 2010 by Rodney Schmidt, Stephan Schulmeister and Bruno Jetin “it is technically easy to collect a financial tax from exchanges ... transactions taxes can be collected by the central counterparty at the point of the trade, or automatically in the clearing or settlement process."