Provides particulars on proposed tax, background
VILNIUS, March 9 (Reuters) – Lithuania’s finance minister proposed on Thursday a short lived windfall tax on financial institution income, aiming to lift an estimated 510 million euros ($538.7 million) over a two-year interval.
Banking income within the Baltic nation have risen sharply on the again of upper rates of interest to fight hovering inflation.
If permitted by parliament, the proceeds from the additional taxes on 2023 and 2024 financial institution income could be used for defence spending, Finance Minister Gintare Skaiste mentioned at a information convention.
“Largely, the coverage of banks has no affect on the income, they’re on account of distinctive circumstances, and are most likely stunning to banks themselves,” Skaiste mentioned.
The federal government and the central financial institution had beforehand mentioned Lithuania was considering a windfall tax on the banking business, however had not mentioned how a lot this might increase.
The federal government’s proposal would impose a two-year tax of 60% on the a part of a financial institution’s curiosity revenue that’s greater than 50% greater than a four-year common, Skaiste mentioned.
Two Swedish-owned teams maintain greater than half of Lithuania’s banking belongings, Swedbank SWEDa.ST, whose 2022 income elevated by 64% to 148 million euros, and SEB SEBa.ST, whose income have been up 49% to 172 million euros.
Each SEB and Swedbank could be affected by the tax, Lithuanian central financial institution Governor Gediminas Simkus mentioned.
Banks in Lithuania may earn a mixed revenue of 1 billion euros in each 2023 and 2024, greater than thrice the extent of current years, based on Skaiste.
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Reporting by Andrius Sytas in Vilnius; Writing by Terje Solsvik; Enhancing by Gwladys Fouche and Shounak Dasgupta
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