LITHUANIA – LEGISLATION
Lithuania’s Finance Ministry on Thursday proposed a temporary tax on bank profits to raise about 510 million euros ($538.7 million) over two years, Reuters reported.
Bank profits in the Baltic country have risen significantly as interest rates have risen to combat rising inflation.
If the law is approved by parliament, revenues earned from the bank excess profits tax in 2023 and 2024 will be allocated to defence, Finance Minister Gintare Skaiste said at a press conference.
Under the ministry’s proposal, a 60% tax would be imposed in 2023 and 2024 on that portion of bank interest income that is 50% higher than the average for the past four years.
Two Swedish groups own more than half of Lithuania’s banking assets: Swedbank, whose profits in 2022 rose 64% to €148 million, and SEB, whose profits rose 49% to €172 million.
According to the Governor of the Central Bank of Lithuania, Gediminas Simkus, the tax will affect both SEB and Swedbank.
SEB, Swedbank and the Lithuanian Banking Association, which unites most of the country’s banks, declined to comment.
According to Skaiste, Lithuanian banks may earn a combined profit of 1 billion euros in 2023 and 2024, which is three times the level of recent years.
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