The government approved a bill on Thursday under which Slovenian banks and businesses are expected to help finance a significant part of the reconstruction budget, estimated at 10 billion euros, after devastating floods in August, Euractiv reported.
Under the bill, banks will be taxed at 0.2 per cent of their total assets and the annual tax will be capped at 30 per cent of operating profit.
The government has also approved a decision in favour of a five-year increase in the corporate tax rate, which will rise by three percentage points to 22%.
Only the difference between the existing rate of 19% and the revenue from the temporarily increased rate will be used for the reconstruction.
Other sources include part of the Slovenian state holding company’s profits, budgetary funds and EU sources. However, the new tax is being introduced amid strong objection from the business community, which argues that the higher rate will deter investment.
Moreover, the European Central Bank (ECB) has warned that the bank tax could potentially damage both the banking sector and the economy as a whole.
“Care must be taken to ensure that such a tax base does not induce credit institutions to shrink their balance sheets by reducing lending beyond what would be warranted from a monetary policy perspective.”
