Parliament approves higher special bank levy

MPs passed a bill which will increase the special levy on certain financial institutions and will become effective in the last quarter of the year. The basis for calculating the levy will be widened to include retail deposits, the SITA newswire reported on July 26.

MPs passed a bill which will increase the special levy on certain financial institutions and will become effective in the last quarter of the year. The basis for calculating the levy will be widened to include retail deposits, the SITA newswire reported on July 26.

At the same time, deputies also approved proposals regarding a gradual decrease in the levy rate and temporary suspension of the duty for banks to pay a contribution to the Deposit Protection Fund. Pending the president's signature, the law will come into force from September 2012.

Banks will be obliged to pay the special levy into a so-called resolution fund until this contains €1 billion. After collecting the first €500 million, the levy rate will decrease from 0.4 percent to 0.2 percent of the calculation base, and after collecting €750 million to 0.1 percent.

The original draft proposed a levy rate of 0.4 percent on corporate deposits, but the approved draft widened the calculation base to include retail deposits.

Next year, banks are expected to pay a total of €200 million in the form of levies, while this year the sum will reach approximately €50 million.

The Slovak Banking Association, which represents banks, estimates that banks in Slovakia will pay about 55 percent of their profits in the form of taxes and levies. Next year’s levy burden of €200 million will negatively affect the capital of banks, and thus their ability to provide new loans, it said.

Finance Minister Peter Kažimír responded that if the capital adequacy of several banks is threatened, the government will respond by changing the law, SITA wrote.

Source: SITA

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

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