Romania reportedly prepares new bill to fix bank tax

Authorities seem to have decided the way to change the tax on banks’ financial assets, according to sources of After considering several variants, the finance ministry will allegedly substantially change the tax by reducing its level and calculation base through excluding some asset categories, the source added. In addition, the tax will no longer be linked to the interbank rates index, ROBOR. Also, banks could also benefit from tax reduction in certain conditions, such as increased lending and lower bank margins. All should lead to a notably smaller impact on the banking sector, namely at about RON1bn from RON4.5bn in the initial version of the tax.

The information comes in a tense context, because S&P is expected to announce its decision on the appeal field by the government on Romania’s sovereign rating outlook later today or tomorrow (Mar 16). As recalled, S&P affirmed Romania’s sovereign ratings at BBB-/A-3 at the beginning of March, announcing that the outlook was under appeal. Markets rumoured that S&P would have announced an outlook downgrade to negative, preparing for a rating downgrade later this year, due to the significant negative effects of the bank asset tax legislation. The government committed to adjust the bill for diminishing its economic impact, so the ratings agency would probably reconsider its initial intent. Besides, Finance Minister Eugen Teodorovici revealed that he expected good news form S&P in that regard.

Share this post