The possible taxation of excess profits must be preceded by an assessment of who will actually bear the economic burden of the tax. This was insisted on by Lyubomir Karimanski, a member of the BNB Governing Council, in the program “Face to Face“ on bTV.
The topic is related to ideas of “Progressive Bulgaria“ for taxation of banks, telecoms, retail chains, insurance companies and payday loan companies. Karimanski defined the proposals as ideas that must be supported by analyses and assessments.
“It is imperative to assess where and to whom the economic burden of the tax is ultimately transferred,“ said Karimanski.According to him, banks must be examined to see whether the tax burden will not be transferred throughout the entire chain of their activities. This includes capital, profit distribution, reinvestments and dividend payments.
He pointed out that the assessment must take into account the return on assets and the return on capital of individual banks. According to him, it is not enough to compare profits if the base period was unusually weak.
As an example, Karimanski pointed to the pandemic in 2020-2021. He warned that if years with distorted or extremely low values are chosen as a base, subsequent data may look like excess profits, without necessarily reflecting the real effect of the measure.
The example from Italy
Karimanski drew a parallel with Italy, where, according to him, such taxation is not defined as a tax on excess profits, but is related to the net interest margin. He explained that it is about the difference between income from loans and interest expenses on deposits.
According to him, taxation of the part of the margin above a certain threshold, for example 10%, has been discussed in Italy. The initial proposal was changed in parliament so that banks that capitalize their profits could strengthen their capital.
„At the same time, for the fiscal, the result is almost equal to zero“, said Karimanski.He pointed out that this approach has enabled Italian banks to maintain higher capital sustainability and continue to lend to economic entities.
Comment on the fiscal reserve
Karimanski said that the fiscal reserve is relatively stable and is at high values compared to previous years. He described it as the single account through which the state makes its main payments.
According to him, the deficit for 2026 will not reach the amount set in the state budget, but will be lower.
Sources: btvnovinite.bg