Biznes Fakty
Excess profit tax for banks. Katarzyna Pełczyńska-Nałęcz: they earn a ridiculous amount
Banks are currently earning four times more than the average over the past 15 years, primarily due to exceedingly high-interest loans, as noted by Minister of Funds Katarzyna Pełczyńska-Nałęcz. She remarked that this approach does not foster but rather „stifles” Polish growth.
In her statement on Sunday via the X platform, Pełczyńska-Nałęcz mentioned that her suggestion to impose a tax on excessive bank profits in Poland „sparked a response from the pro-banking lobby” defending the banks.
Pełczyńska-Nałęcz on banks: they possess excessive funds
„Banks (…) generate an absurd amount of income. Four times higher than the annual average over the last 15 years. Their profit stems from the fact that they provide very low interest rates to depositors – significantly beneath inflation – while simultaneously offering extremely high-interest loans. In other words, they acquire funds at a very low cost and sell them at a high price. The disparity between the two in Poland is the largest in Europe,” she informed the Minister of Funds.
She referenced this to debunk the notion that banks’ substantial profits are merely a consequence of elevated central bank base rates.
Pełczyńska-Nałęcz evaluated that the interest rate on loans should not exceed the NBP base rate. Furthermore, she stated that in July 2024, in 18 EU nations, the average interest rate on mortgage loans was lower than the central bank’s base rate. She noted that at that time in Poland, „mortgage loans surpassed NBP rates by over 2 percent (more than 2 percentage points – editorial comment) and were the costliest in the EU.” The head of the Ministry of Funds and Regional Policy also claimed that banks do not facilitate Polish development, but rather „hinder” it. According to her, banks, possessing „excess funds,” do not need to pursue customers, which results in unattractive loan offers. „The outcome? Poland has the least development loans in the EU, and company investments decreased annually by 7.8 percent,” she wrote. The minister further asserted that implementing a tax on excessive bank profits would be beneficial as it would compel banks to support Polish development. „Banks stripped of their 'heavenly manna’ will finally have to 'get to work’ and seek profit where they should – by funding Polish businesses and infusing capital into Polish growth. Only by scaling up their operations can they recover lost profits,” she stated.
Domański on tax on excess profits for banks
Finance Minister Andrzej Domański commented on her proposal for a new bank tax in the media on Wednesday. He indicated that banks already contribute significantly in taxes within Poland and assessed that the banking sector „is currently financing the economy” as Polish companies rely on banks for loans. – Banks (…) are the largest taxpayers among economic sectors. This amounts to over PLN 13 billion from CIT (…), and we also have a separate tax already levied on banks, which accounts for over PLN 6 billion in additional revenues – Domański reported on Program Trzeci of Polskiego Radio.
Simultaneously, the Minister of Finance acknowledged that the earnings and profits of the banking sector „are indeed considerable,” but pointed out that these outcomes are driven by high-interest rates set by the Monetary Policy Council. He mentioned that, in line with analysts’ predictions, interest rates are expected to decrease this year, subsequently leading to a decline in „limited sector profits, which are of a temporary nature.”
Domański also highlighted that more than 50 percent of the assets in Poland’s banking sector are controlled by state-owned banks, which is why „the profits from these banks, in one way or another, significantly contribute to the budget.”
Proposal by Katarzyna Pełczyńska – Nałęcz
Last week, Minister of Funds Katarzyna Pełczyńska-Nałęcz proposed the implementation of a tax on excessive profits within the banking sector in Poland. She suggested that the revenue generated from this tax could be allocated towards investments in defense. – Currently, banks in Poland are generating extraordinary profits, and there exists a mechanism for taxing extraordinary profits. This could be a one-time tax, introduced for a year, with the possibility of extension. The Czech Republic has enacted such a tax, while Italy and Spain have undertaken similar measures. Given the current geopolitical climate, Poland should follow suit and impose taxes on these excessive profits – the minister indicated in an interview with „Puls Biznesu”. She added that the ultimate aim is for the flow of taxpayer money, currently accumulated in bank revenues, to return to society: „for security, perhaps also for health.” She noted that an additional benefit would be that banks would reconsider their income strategies for the years ahead.
