Romanian banks could reduce new tax by boosting lending-FinMin
BUCHAREST, March 22 (Reuters) - Romanian banks could bring a
new tax on their financial assets down to zero if they boost
lending and narrow the interest rate differential between
deposits and loans, Finance Minister Eugen Teodorovici said on
The new bank tax was introduced in late December along with
new energy and telecoms taxes as the government struggles to
keep its budget deficit within European Union limits.
The taxes and other measures announced in the emergency
decree sent shares and the leu currency to record lows and
Standard & Poor's briefly considered downgrading Romania's
credit rating outlook.
The government, which has said it aimed to lower borrowing
and energy costs for Romanians, has been negotiating potential
changes to the decree with the affected industries.
The bank tax was initially tied to a specific level of money
market interest rates, which are also used as a reference point
for household loans. But tying the tax to money market rates
threatened the central bank's independence, so the government
has agreed to remove the link, Teodorovici said.
The proposed bank tax will be lowered, and several types of
financial assets, including state debt and government-funded
programmes will be exempt from it.
In addition, Teodorovici said banks could pay less tax if
they boost lending by 8 percent on the year and narrow the
interest rate differential between deposits and rates by 4
Teodorovici also said more talks were needed for energy and
telecoms sectors to agree potential changes.
The other measures announced in the decree included changes
to Romania's 11-year-old mandatory private pension scheme,
slashing management fees for fund managers, forcing them to
raise their share capital by an overall 800 million euros and
enabling Romanians to withdraw from private pension funds after
contributing for five years.
Teodorovici said the only change under discussion here was
the share capital requirement, which could cause a brief delay
in implementation until the ministry and the funds reached an
Changes to the bank tax and potentially the other levies and
measures could be approved by March 28. Otherwise, the December
decree would come into effect at the end of the first quarter.
(Reporting by Luiza Ilie; Editing by Elaine Hardcastle)
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