Fico’s proposal to tax banks is ridiculous says SBA

The proposal put to parliament yesterday by opposition party Smer-SD to tax banks has been called ridiculous by the Slovak Banking Association.

Robert Fico’s Smer-SD party is proposing that banks be taxed an additional 1.35% on certain liabilities as a way of getting additional revenues into the state coffers. The Slovak Banking Association (SBA) responded immediately, however, saying it was economic stupidity and could not be taken seriously.

“Clients’ deposits account for almost 70% of banks’ liabilities, so it would be the clients themselves that would suffer the most,” said head of the SBA, Ladislav Uncovsky. The SBA also contested the fact that it would be the highest tax of its kind in the European Union, and would even be 75 times higher than the tax in Sweden, for example.

Robert Fico claims that the special tax would generate an additional EUR 186 million in 2011 alone, proposing that this be implemented instead of the government’s plans to increase VAT from 19% to 20% next January.

Fico said that the government should be looking for additional revenues in the simplest forms, instead of targeting the poorest segments of the population, but according to the SBA it is those very people that will suffer in the end.

The motion is scheduled to be discussed in parliament in November.

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