PZU Insurer Slumps to Three-Year Low on Higher Tax Plan

  • Polish government plans to introduce 0.6% tax rate on insurers
  • PZU to pay about 400 million zloty of new tax next year

Poland’s largest insurer plummeted to a three-year low as the government proposed to introduce a higher-than-expected levy on insurers’ assets.

PZU SA dropped as much as 6.3 percent and traded 4.2 percent lower at 36.61 zloty as of 3:20 p.m. in Warsaw. The ruling Law & Justice party presented a plan to impose a monthly tax rate of 0.05 percent, or 0.6 percent annually, on insurers’ assets above 4 billion zloty ($995 million), party lawmaker Wojciech Jasinski said at a news conference in Warsaw. This compares with expectations for an annual rate of 0.39 percent, analysts say. 

“Nobody expected such a rate and it wasn’t priced in,” Dariusz Gorski, an analyst at Bank Zachodni WBK SA in Warsaw, said by phone. The new tax will cost PZU about 400 million zloty a year, or 140 million zloty more than in the case of the previously expected rate, Gorski says.

The ruling party, which will file on Thursday a draft bill for banks and insurers levy, plans to tax 0.39 percent of banks’ assets exceeding 4 billion zloty, in line with earlier declarations. The new burdens, which are to set to provide the state budget with as much as 6 billion zloty a year, will come into force from Feb. 1, according to Jasinski.

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