Tax expert questions need for bank levy

A visiting international tax expert has questioned why Australia is proposing a levy on its major banks, warning it will come at a cost to customers, shareholders and bank employees.

Chas Roy-Chowdhury, head of taxation at the global Association of Chartered Certified Accountants, says if the federal government wanted banks to pay for any potential bail-out provision, why didn't it do it during the global financial crisis.

In any case, he believes such a levy should be broad-based rather than narrowly based on five major banks and should have a time limit, as it does in the UK and US.

"It is something that should 't be there for all time as a pure tax-raising measure," he told AAP on Thursday.

"It's not good for Australia having a tax for taxes sake."

Mr Roy-Chowdhury says the levy was also a cost to the banks which will be passed on as higher bank charges, lower wages for bank employees or lower dividends for shareholders, which affects pensions.

"It's not a cost-free option as the politicians seem to think," he said.