Taking into account that lending volumes are not growing, possibility of introducing windfall tax on banks should be assessed - economics minister

  • 2023-08-03
  • LETA/TBT Staff

RIGA - Taking into consideration that lending volumes are not increasing, the possibility of introducing a windfall tax on banks should be assessed, Economics Minister Ilze Indriksone (National Alliance) told LETA after a meeting with President Edgars Rinkevics on Thursday.

The part of banks' profits earned as a result of the European Central Bank's rate hikes should go into the economy, helping businesses increase investment and boost exports and productivity, said Indriksone.

The Tax Policy Coordination Group on Wednesday discussed tax reforms in Lithuania and Estonia, said Indriksone. She believes that Latvian subsidiaries of large banks should pay income tax in advance so that money does not flow out of Latvia.

According to Indriksone, many businessmen point out that banks do not wish to take risks, while programs of development finance institution Altum cannot compensate for the insufficient lending.

"We are actively working on improving Altum programs and developing new ones to cover a broader range of needs, loans that companies in other countries take out in banks. In Latvia, commercial banks are not ready to lend money for such projects, leaving businesses without opportunities to develop," said the minister.

Indriksone said that she and Rinknevics today also discussed hiring workers from third countries, economic growth, economic transformation, investment, innovation, human capital and changes in public administration.