Latvia may raise about €140 million ($153 million) in additional tax revenue next year under a proposal that would force banks to pay taxes annually, instead of when they pay out dividends.
The proposal is part of a package of potential tax changes ahead of 2024 budget talks and was chosen over a windfall tax on lenders’ profits, the Finance Ministry said Monday.
The Baltic country’s financial sector, which is dominated by Nordic lenders such as Swedbank AB and SEB AB, has seen profit rise as about 95% of housing and non-financial corporate loans have floating rates, boosting banks’ net interest income.
The government still needs to discuss the proposal and support is uncertain, Finance Minister Arvils Aseradens said in an interview on TV3. Prime Minister Krisjanis Karins said on Friday that he would work on forming a new government that would include parties from the opposition.
In May, Lithuanian lawmakers backed a temporary windfall tax on banks to finance defense spending, while Estonia plans to raise the tax level on banks to 18% from 14% as part of a series of tax measures to narrow the budget deficit.
