BRATISLAVA, November 4, (WEBNOVINY) — President of the Slovak Republic Ivan Gasparovic has signed into law a bill introducing a special levy of selected financial institutions. From next year, banks will pay a levy to 0.4 percent of selected liabilities, basically corporate deposits. The law defines the tax base as total liabilities net of bank deposits protected by the Deposit Protection Fund and the bank’s capital. Overall expected revenue from this bank levy is about 80 million euros.
The Slovak Banking Association believes that the bank levy rate of 0.4 percent that the Finance Ministry considers appropriate, threatens stability of the banking sector. At the same time, bankers warn it can increase costs for clients with banks offering more expensive products and services. At a time of slowing in economic growth, a special levy on banks in Slovakia may be counterproductive, say analysts. Some banks will not be able to generate enough profit, and hence the capital that will be needed especially in case of the expected deterioration of the economic situation. The Banking Association has proposed that the levy rate should be determined by the National Bank of Slovakia, in agreement with the Ministry of Finance, with regard to the expected financial situation.
The strongest opposition party SMER-SD wanted the levy of 0.7 percent and to enact provisions in the law preventing banks from passing on the costs associated with the levy on to their clients. However, parliament rejected these proposals. SMER-SD Chairman Robert Fico responded to the defeat saying that if after the next year’s early elections his party gets into government, they will return to this bill and try to enact those two proposals.
SITA