Government Passes Law on Special Bank Tax

Even though it is stuck in limbo after failing a confidence motion on 11 October, the government still managed to push through its bill levying a special tax on banks.

National Bank of Slovakia (c) Frettie

The bill was pushed through yesterday, Thursday 20 October, and means banks will now have to pay a levy of 0.4% on selected liabilities (uninsured deposits) to a special fund in support of financial institutions in trouble.

Opposition party Smer-SD wanted to have a bank tax of at least 0.7%, even less than its original plan, but the broken coalition stuck together and endorsed the 0.4% levy. The move has got Slovak banks up in arms, though, as they feel that even 0.4% is excessive.

The Ministry of Finance projects to generate around EUR 80 million from the tax, which will help towards meeting the target of getting the public deficit down to 3.8% of GDP in 2012. Good for public finances, but banks by way of the Association of Slovak Banks are warning that the effect of the tax will be reflected also on charges to customers.

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