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Finance Ministry opposes levy on banks

THE FINANCE Ministry has spoken out against a proposal initiated by MPs from the opposition Smer party to impose special levies on banks.

THE FINANCE Ministry has spoken out against a proposal initiated by MPs from the opposition Smer party to impose special levies on banks.

“The proposal bypasses the ongoing European discussion and contains technical shortcomings, but above all it is based on bad calculations and ignores negative impacts on citizens and the country’s economy,” said Martin Jaroš, the spokesperson of the Finance Ministry

He added that the levy would have a negative impact on the entire banking sector and thus on the Slovak economy.

The Smer deputies proposed that banks should pay new levies calculated at 1.35 percent of a portion of their liabilities, which the MPs said would bring revenue of €186 million to the state, a sum similar to the amount the state expects to get from the VAT increase scheduled for January 1, 2011.

On November 4, parliament voted to discontinue a debate on the proposal. On Wednesday, November 3, Smer leader Robert Fico had offered to halve the proposed new levy.

Opponents of the measure have argued that instead of the projected €186 million, the measure would actually raise close to €400 million, effectively wiping out the entire banking sector's annual profits.

In the parliamentary discussion, Jozef Kollár of ruling coalition party Freedom and Solidarity (SaS) said that the draft legislation from Smer was highly populist. He criticised its poor technical and factual quality.

He underscored that though Fico said several times before the 2006 election that Smer would raise more money for social programmes by imposing extra taxes on banks, the party had failed to do so while in government during the previous four years.


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