Business News

Govt Proposes Taxing Banks' Total Assets

Ljubljana, 21 April (STA) - The government endorsed on Thursday a bill introducing a tax on total assets of banks, which is supposed to encourage banks to give out loans to businesses. The new form of tax is meant as a temporary measure, as the need for it should be reassessed in 2013.

The government wants to introduce the new tax to get back some of the money the state allocated to the banking system during the crisis while at the same time encouraging loan activity.

Banks which are active in giving out loans will get certain incentives and could even be exempt from the new tax.

Other banks will however have to pay tax in the amount of 0.1% of their total assets for the year, defined as the average of their monthly total assets as they were on the last day of each month, Finance Minister Franc Krizanic explained after the cabinet session.

The incentives will include a tax cut in the amount of 0.2% of the bank's loans to non-financial companies and entrepreneurs. If this sum will match the tax figure, the bank will be freed from paying the tax.

Also exempt from tax will be banks whose credit activity will increase by 5% and those which will give 60% of their loans to businesses, Krizanic pointed out.

The minister expects the law to have no major effects on the budget, as it is expected to bring in only some EUR 5m. He however expects that subsequently loan activity will pick up after it has been falling since July 2010.

The new tax should apply as of 1 May under the bill. Savings banks, which offer loans mainly to individuals, and the state-owned SID export and development bank, which gives out loans to financial institutions, will be exempt from the law.

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