A proposed tax on banking assets is estimated to bring in 40 million euros in extra annual budget revenue, well below the publicly discussed amount of 100 million euros, the Lithuanian Farmers and Greens Union's leader Ramunas Karbauskis said on Wednesday.
Ramūnas Karbauskis
© DELFI / Kiril Čachovskij

"As far as I know, this is about 40 million euros. This is a significant amount, but not a large one for the banking sector (...). A hundred million euros is not what is planned to be raised. To my knowledge, the Finance Ministry's estimate is around 40 million euros," he told the Ziniu Radijas radio station.

Karbauskis dismissed a warning by the Lithuanian Banks' Association (LBA) that a tax on banking assets would lead to a hike in interest rates on loans.

"This is absurd; we don't live in some kind of closed vessel. All countries are interconnected, and the banking sector cannot charge interest three times as high as in Germany or elsewhere,” he said.

According to Karbauskis, Lithuania has one of the lowest tax collection rates in the EU and has to look for ways to collect more taxes.

According to LBA, a preliminary impact analysis shows that the proposed tax may drive up prices for banking services by 8 percent, or around 60 euro cents per customer monthly.

Back in March 2016, the Electoral Action of Poles in Lithuania–Christian Families Alliance, the Farmers and Greens' government coalition partner, registered draft amendments that call for taxing financial institutions' assets worth over 100 million euros and insurance companies' assets worth over 50 million euros at an annual rate of 0.4 percent.

The initiators of the amendments say some European countries, such as Britain, Hungary, Portugal, France and Sweden, have similar taxes on banks and financial institutions.

BNS
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