Czech banks should pay up to 20% of their dividends into a new state development fund, Prime Minister Andrej Babis said on Sunday, as his government sought new revenue streams against a backdrop of slowing growth.<\/p>\n
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The country\u2019s banks have been strong profit drivers for their mostly Western parents, with their combined earnings rising 9%\u00a0 to 82.1-billion koruna ($3.58bn) in 2018.\u00a0However, they have often faced criticism for dividends flowing abroad.<\/p>\n
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The largest Czech banks are all foreign-owned. CSOB is held by Belgium’s KBC, Ceska Sporitelna is part of Austria\u2019s Erste Group, and Komercni Banka is majority-owned by France\u2019s Soci\u00e9t\u00e9 G\u00e9n\u00e9rale.<\/p>\n
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With economic growth predicted to slow and budget spending rising, the Czech Republic\u2019s public finances are expected to fall back into deficit for the first time since 2015 from 2020.<\/p>\n
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Babis has rejected introducing a sector tax on banks\u2019 assets, which his junior governing partner the Social Democrats had proposed to raise budget revenue. Instead, he said banks could pay into a new state development fund being readied.<\/p>\n
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\u201cWe are talking with banks, and we are saying, from these dividends … leave us some part, obligatory. We can talk about 10% to up to 20%,\u201d he said on a debate show on Czech television.<\/p>\n
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Talks with banks were continuing and the amount of the payment was open to discussions, he said. \u201cWe are saying, try to leave some of this [dividend] here, we will use it for investments, for the fund of national development.\u201d<\/p>\n
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Babis repeated that a sector tax on assets was not being planned as it would hurt the economy and consumers.<\/p>\n
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The Czech banking association has argued against a sector tax, saying it could hurt the banking system\u2019s ability to finance the economy.<\/p>\n
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Via Reuters<\/p>\n","protected":false},"excerpt":{"rendered":"