The Major Bank Levy is a tax on the liabilities of the major Australian Banks – that is the deposits, bills of exchange, long term loans and other funds used by the banks to generate their profits.
The Major Bank Levy is budgeted to raise $1.6 billion in 2018-19, and $7 billion over the forward estimates. It is our twelfth largest tax.
The Major Bank Levy represents 0.34% of Commonwealth revenue in 2018-19, and 0.08% of GDP.
The Major Bank Levy is applied to all deposit taking institutions in Australia with liabilities over $100 billion. In practice this threshold means the levy applies to the big four banks – Commonwealth, NAB, ANZ, Westpac - and Macquarie Bank. It is assessed and paid quarterly, at an effective annual rate of 0.06%.
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The model does not take account of the impact of changes to the Major Bank Levy on Company Tax paid by the major banks, or of any other second round effects.