WARSAW: The International Monetary Fund (IMF) has reiterated its concern that Poland’s bank asset tax will undermine credit expansion and economic growth.
The 0.0366 percent monthly tax was introduced in February to partly finance a new child benefit scheme. It applies to the assets of certain banks exceeding a PLN4bn (USD1bn) threshold. The tax is also paid by credit institutions on assets over PLN200m and insurance companies on assets exceeding PLN2bn.
In previous statements on the Polish economy, the IMF said that the tax is “distortionary” and could lead to a reduction in credit supply.
Having noted that the bank asset tax has induced banks to significantly increase holdings of government bonds, the IMF urged Poland in its latest assessment of the Polish economy to monitor the effects of the tax, and adjust the levy “if adverse effects on banks’ activities and risk profiles become apparent.”
A tax on banks’ profits and remuneration “is a less distortionary alternative to the bank asset tax,” the IMF said.
