Government approves proposal to extend banks’ solidarity levy until end-2025
Amendments to the temporary solidarity contribution law will be tabled in the Parliament as a matter of urgency.
The draft bill says that the tax should continue to be levied on net interest income exceeding by more than 50% the last four years’ income. However, it is proposed to change the period for calculating the tax to 2019-2022 instead of 2018-2021, which applied in 2023 and 2024.
The extension of the tax is expected to generate EUR 60 million to meet defence needs.
The Cabinet sitting was attended by Eivilė Čipkutė, president of the Lithuanian Banking Association (LBA), who criticised the proposals. She does not understand why banks have to pay more than other large businesses. According to her, no other sector, which periodically receives higher income due to external conditions, is subject to such taxation.
„Banks do not support the extension of the solidarity levy. They do not understand why they are treated differently from other large businesses. How are they different from the grain and dairy markets, where results fluctuate depending on external factors?“ Čipkutė asked the Government at the sitting.
The LBA president said that banks have already contributed EUR 0.5 billion to defence through the temporary solidarity levy. She also argued that the income generated by higher interest rates is set to fall.
„Interest income will decrease, so there is no reasoning behind that anymore. Smaller banks do not have any interest income at all because they pay for fixed-term deposits,“ Čipkutė said.