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Bank levy to be scrapped after €1 billion is raised

Funds yielded by the new bank levy on deposits of both individuals and companies, which the current government has upped to 0.4 percent of banks' selected assets, will flow into a special fund and will end once the amount raised reaches €1 billion, the TASR newswire reported on Thursday, July 19.

Funds yielded by the new bank levy on deposits of both individuals and companies, which the current government has upped to 0.4 percent of banks' selected assets, will flow into a special fund and will end once the amount raised reaches €1 billion, the TASR newswire reported on Thursday, July 19.

The €1-billion limit stems from amending proposals to the respective government-approved bill that were approved at a session of parliament's finance and budget committee on Thursday, July 19. The level of the levy is set to drop on a par with the amount of assets placed in the fund until the amount available reaches €1 billion. The levy will then be scrapped.

"We've decided that the money that will be yielded by the bank levy won't flow into the state's financial assets forever. Rather, it will flow until the fund is filled up with €1 billion," said Finance Minister Peter Kažimír. This figure represents 1.45 percent of the overall assets of the Slovak banking sector. The 0.4-percent rate of the bank levy will be halved once €500 million has entered the fund. It will fall further, to 0.1 percent, after €750 million is deposited.

The amending proposals are designed to send out a signal to investors and bank shareholders that the extra levy to be placed on banks is designed to set up a fund to cover potential losses from future crises. At the same time, the funding acquired will help the state in its drive to cut the public-finance deficit. While expressing appreciation for the government's efforts to curb the deficit, opposition MP Jozef Kollár of Freedom and Solidarity (SaS) said that the levy is still too high. After the changes are approved, it will be six times higher than the EU average and 22 times higher than in Germany, he said.

Source: TASR

Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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