Slovenia Moves Ahead on New Tax on Banks, Companies

Jan Bratanic
·1 min read
1

(Bloomberg) -- Slovenia’s government approved a tax on banks and higher levies on companies to help fund reconstruction projects following the country’s worst natural disaster in at least three decades.

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The Alpine state of 2.1 million people was hit by severe floods in August that destroyed businesses, homes and infrastructure, while leaving at least seven people dead. Rebuilding efforts, which could cost up to €10 billion ($10.9 billion) or some 18% of Slovenia’s annual economic output, are straining public finances, adding pressure on the government.

The new legislation, which requires parliamentary approval, aims to impose a 0.2% tax on total banking assets. The measure, which is seen raising about €100 million annually, brings Slovenia into a growing camp of European Union member states seeking to plug budget gaps through special taxes on banks that have been posting record profits.

The government also aims to boost the corporate tax rate to 22% from 19%.

Both measures are to be levied for the next five years, with estimated revenues of about Є1.5 billion through 2029, Finance Minister Klemen Bostjancic told reporters in Ljubljana. Still, the main financial source for next year and beyond will be “borrowing by the state,” he said.

Prime Minister Robert Golob has seen his government’s ratings plummet to the lowest levels since taking power last year amid accusations of meddling in police work, a failed cabinet reshuffle, infighting in his ruling party and voter dismay over the coalition’s failure to push reforms.

(Adds finance minister comment, estimate of tax revenues in fifth paragraph.)

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