The largest bank operating in Estonia, Swedbank made a net profit of 385 million euros last year. Compared to the previous year, profit doubled. The huge profit once again raised the question of how large the banks’ contribution to the state budget can be.
During the summer budget debates, Social Democrats proposed introducing a temporary bank tax on banks’ excess profits, following the example of Lithuania, but found no support. Now the leader of the Social Democratic Party, Interior Minister Lauri Läänemetsa, has proposed that banks help finance teachers’ salary increases.
“We put forward this proposal during the preparation of the state budget in the summer, and in the government we could not find an agreement on this temporary bank tax. But when I look at the current situation, where the prime minister says that 10 million euros cannot be found, I think that we should not impose a tax on banks if the prime minister, for example, could meet with bank directors and say that it would be a very solid and fair thing: banks in Estonia could freely solve the problem, where today research of a solution is blocked,” said Läänemets.
Finance Minister Mart Võrklaev (RE) rejects the idea because, according to him, banks already pay a lot into the state budget.
“I understand that Lauri Läänemetsa really likes populism, but the banks already contribute 80 million euros this year with an additional dividend payment, there will be another six from last year, the total is actually 84 plus 90 million per month. Another 40 million next year, in 2025. From 2016 the advance tax on banks’ income will increase from 14% to 18% – this is one of the tax changes in this package, which will cover our defense costs” , Võrklaev explained.
Olavi Lepp, director of Swedbank, agrees.
“Swedbank has created an education fund in the amount of 10 million euros. We are working on its launch. We will definitely make a contribution to education. As for this specific idea, which concerns the contribution, I remind you that the entire state budget is a contribution from entrepreneurs, and in four years the budget revenue increased from 10.7 billion to 16.7 billion, plus six billion in four years. I think this money is available in the budget and politicians should just make smart choices,” – commented Lepp.
The center party fraction of the Riigikogu on Wednesday approved a draft decision on the introduction of a temporary solidarity tax for the Estonian banking sector for the years 2024 to 2027. The head of Swedbank does not believe in the sustainability of the banks’ huge profits .
“Certainly not. Like all banks. Interest rates have reached their peak. Rather today we pay more and more for deposits and this profit was a one-off and we will certainly not see it again,” Lepp said.
2024-01-24 16:46:00
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