Slovakia to Impose New Bank Tax

October 21, 2011 Taxation in Slovakia

Slovakian FlagsBRATISLAVA – Slovakian banks will soon be charged a new tax based on the size of their outstanding liabilities.

On October 20th Slovakian lawmakers approved a new tax measure to be imposed on banks, in the hopes of lowering the national budget deficit and shoring funds for future financial sector bailouts.
The new tax will be levied at 0.4 percent of the banks’ outstanding liabilities, excluding any insured deposits, core capital and savings deposits. Commenting on the approval of the bank tax the spokesperson for the Finance Ministry of Slovakia Martin Jaros said that the tax is expected to raise the government’s tax revenues by approximately EUR 80 million per annum.

Martin Jaros explained that the tax was proposed as a response to the progressively deteriorating financial situation across the European Union. The new tax would be used to create a precautionary bailout fund to deal with any instability arising in the banking sector in the future.

The tax has seen widespread support amongst politicians, with the measure being passed in parliament with 144 votes of approval, 3 abstaining, and only 3 votes against the tax. Shortly after the bank tax was approved the current opposition party Smer-SD came forward to say that it would continue to support the tax if it is elected in the country’s election next year. Further, a Smer-SD spokesperson added that the party would also takes steps to raise the rate of the bank tax to 0.7 percent.

So far the only significant criticism of the new bank tax has come from the country’s banking association, which claims that the tax will is counterproductive and will only serve to cause instability in the banking sector.

Photo by antaldaniel