As of next year, banks will pay a higher tax levy. While it is currently 0.2 percent of the balance sheet liabilities of banks, the rate will double to 0.4 percent next year. On Wednesday, the Government unanimously approved the draft amendment to the law presented by the Finance Ministry. The aim of the measure is to obtain more money for the state budget.
The special bank levy entered into force in 2012, originally covering potential future financial crises, and protecting the stability of the banking sector in Slovakia. It should have ceased to apply as of next year. Since the levy will be doubled as of next year, the banks should contribute an additional €144 million to the state budget in 2020.
"As for the bank levy, I responded to a call from the Coalition Council today. It is one of the income measures set to contribute towards boosting the state's financial assets. This money needs to be allocated where it's supposed to go under the law, and that's precisely what will happen," said the Finance Minister Ladislav Kamenický. According to Kamenický, the bank levy hike opens the door to squeezing down next year's public budget deficit to 0.49 percent of GDP, in line with the approved budget draft. Moreover, he maintains banks in Slovakia are in good shape. "They enjoy above-average profits within the EU, and I submitted the hike proposal with this in mind," he said.
The governor of the National Bank of Slovakia and the former Finance Minister Peter Kažimír believes that the government's decision to hike the bank levy next year and also its continuation in the coming years poses an increased risk in terms of financial stability. "I tried to convince the finance minister and the whole Cabinet that the levy was not endless. I failed," Kažimír said after the Cabinet's session. The Slovak Banking Association has also criticised the proposed move, stating that even the current 0.2 percent levy already amounts to a form of double taxation.
