Romanian Govt Does Not Support Additional Tax On Bank Profit Without EU Agreement

Romania's Government does not support introducing a "solidarity tax" of 2.5% on the profit of financial and lending institutions, proposed by a number of MPs, without a EU consensus, fearing that banks will transfer their profit abroad.

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Imaginea articolului Romanian Govt Does Not Support Additional Tax On Bank Profit Without EU Agreement

Romanian Govt Does Not Support Additional Tax On Bank Profit Without EU Agreement

Revenue from the tax would go into the social security budget, according to the proposal by several democrat liberal senators. This tax would be in force for three years. The senators argued that the banks' profit derives from "abusive fees" charged to their clients, and that the state needs this solidarity tax.

In addition to the lack of a EU consensus to apply the tax in all member states, Romania's Government points out that the "abusive fees" should be restricted through regulation, not taxation.

In February, the Finance Ministry warned that the introduction of a "Robin Hood tax" would have negative effects on the business environment, increasing transaction costs, risk and liquidity premiums, investment costs, while reducing foreign investment flows.

Raiffeisen Bank Romania executive president Steven van Groningen said a tax on bank profits is counterproductive and will likely be paid by the clients, while BCR executive president Dominic Bruynseels said the tax is a bad idea and would lower the banks' ability to hike their capital and improve their lending conditions.

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