The Australian Bank Levy: do shareholders pay?

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Abstract

Since the global financial crisis, the tax treatment of banks has gained interest in academic and public policy arenas. In this paper, we investigate the stock price reaction of a small sample of commercial banks that were affected by the sudden introduction of a bank levy in Australia. The results of an event study analysis suggest that there is a significant decline in the returns of affected banks following the announcement of the bank levy. This suggests that the banks liable to pay the Australian bank levy lose a considerable percentage (5.2%) of their market capitalisation following its announcement.
Original languageEnglish
Pages (from-to)412-415
Number of pages4
JournalFinance Research Letters
Volume28
Early online date22 Jun 2018
DOIs
Publication statusPublished - Mar 2019

Keywords

  • Bank levy
  • Taxes
  • Australian banks
  • Event Study

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