News in English

2019.12.13 15:00

Bank tax hike may be unconstitutional, Seimas lawyers warn

Jūratė Damulytė, BNS2019.12.13 15:00

The proposed hike in the corporate income tax rate for banks, currently under debate in the Lithuanian parliament, may run counter to the constitutional principle of equality, the Seimas' lawyers have concluded.

The draft amendments that passed the second reading in the parliament on Tuesday propose taxing a bank's earnings above 2 million euros at a 20 percent rate, up from the current 15 percent.

The amendment was tabled in place of an earlier proposal to impose a tax on bank assets.

The increased tax rate would apply to banks and credit unions, but not to lenders that do not hold bank licenses, such as the payday loan providers, said the Seimas Law Department.

According to the lawyers, the amendment "does not lay down any objective criteria for the selection of taxpayers to be subjected to [the new] taxation," which would indicate unequal treatment contrary to the Constitution.

The Law Department recommends asking for the Bank of Lithuania's opinion and consulting the European Central Bank.

Finance Minister Vilius Šapoka has said the corporate income tax hike to 20 percent would generate around 20 million euros for the budget.