Polish Parliament Approves Banking Levy to Help Fund Benefitsby
New bank tax will bring 4.4 billion zloty to Polish budget
Banks and insurers will start paying new tax from Feb. 1
Poland’s parliament approved a tax on financial institution assets on Wednesday, part of the government’s plan to raise funds for new child subsidies.
Banks and insurers will pay a rate of 0.44 percent on their assets annually which will bring 4.4 billion zloty ($1.1 billion) to the budget this year. Parliament’s lower house on Friday approved changes made by the upper chamber, setting a limit for insurers’ assets excluded from the tax at 2 billion zloty at the group level. Unlike banks, insurers will include government bond holdings in their taxable assets.
Law & Justice won last year’s presidential and parliamentary ballots on a pledge to impose taxes on financial institutions to fund more social spending, leading to the biggest drop in the valuations of Warsaw-listed banks since 2008. The planned annual budget revenue from the new levy amounts to 31 percent of local banks’ profit in the 12 months to Nov. 30, data from the Polish Financial Regulator show. Critics including Poland’s Banking Association have said the levy could stun credit growth.
The law needs to be signed by President Andrzej Duda. It will take effect from Feb. 1.