The tax on banks’ extraordinary profits, proposed by the finance ministry, amounts to 60 percent of their net profits for three years. The ministry expects to collect 25 billion crowns every year in this way. This follows Wednesday’s meeting between Finance Minister Zbyněk Stanjura (ODS) and the leadership of the Czech Banking Association (ČBA).

The tax will apply to the six largest banks. This would include Česká spořitelna, Komerční banka, ČSOB, UniCredit Bank, Moneta Money Bank and Raiffeisenbank. The finance ministry will present the final draft of the tax at a press conference on Thursday afternoon.

The banks’ assessment base will be averaged from 2018 to 2021, with an additional 20% added. The entry parameter for whoever becomes a taxpayer will be net interest income above six billion crowns in 2021.

In the short term, introducing a special tax on banks is an effective solution to raise additional funds in difficult times. In the long term, introducing extraordinary taxation may lead to a worse perception of the local business environment. This taxation will not even translate into a structural deficit that needs to be reduced.

The government is considering imposing a tax on banks on extraordinary profits, the so-called “windfall tax,” in the wake of the energy crisis and rising electricity and gas prices. Revenue from the tax could be explicitly used to offset high energy prices.

Stanjura has previously discussed the tax affecting energy companies, banks, and refineries. According to earlier information, it could bring about CZK 70 billion to the budget next year. He envisages the introduction of rules in line with the European measure for energy companies and refineries. It wants to set its conditions for banks.

A few weeks ago, the ČBA offered to support the economy, which would be an alternative to the tax on extraordinary profits and bring up to CZK 50 billion to the state. The proposals included support for affordable housing, financing the State Fund for Transport Infrastructure (SFDI), helping citizens meet their financial obligations, investing in the digitalization of the state, and working with the National Development Bank (NDB).

The profits of banks and savings banks rose in the first half of this year, with their aggregate net profit rising by CZK 23.6 billion year-on-year to CZK 54.61 billion. This is according to data published by the Czech National Bank. The bank’s assets amounted to CZK 9.624 trillion at the end of June, which is CZK 1.1 trillion more than at the end of the year.

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