Austria Gives Go-Ahead To Bank Tax
Wednesday, February 24, 2010
Following the recent banking summit, and despite bitter opposition from its banks,
the Austrian government has announced its decision to introduce a bank tax in
Austria. According to Finance Minister Josef Pröll, it is merely a “question
Austria’s Chancellor Werner Faymann has confirmed that the introduction
of a bank levy is now inevitable, with or without backing from the European
Union regarding a Europe-wide tax.
Although the precise details of the tax have yet to be determined, Faymann
has made known that the new levy could be introduced from as early as 2011.
Determined to consolidate the country’s budget, Pröll is eager to
implement the new levy as quickly as possible.
Proposals put forward by Chancellor Faymann include imposing a levy of between
0.07% and 0.1% on the taxable base. Other details, such as who is to pay the
tax, and what the basis for calculating the tax will be, as well as the exact
tax rate, have yet to be decided. As a benchmark, Faymann has proposed generating
a volume of around EUR500m annually.
A working group consisting of representatives from the Chancellery, the finance
ministry, issuing banks and other banks, will be set up in order to put forward
proposals and to firm up details for the new tax. Nevertheless, Chancellor Faymann
has underlined the fact that ultimate responsibility rests with both the government and
Having agreed in principal to the tax, Josef Pröll once again warned of
the dangers of imposing too great a burden on the country’s financial
institutions, and reiterated that the burden must not be borne by either savers
or borrowers. According to Pröll, the greater the pressure imposed on the
banks, the greater the pressure to pass that burden on.