February 27, 2019 / 12:04 PM / 5 months ago

UPDATE 1-Romania finmin says some assets could be exempt from bank tax

(Adds finmin comment, details)

BUCHAREST, Feb 27 (Reuters) - A new Romanian bank tax could exempt several types of financial assets, Finance Minister Eugen Teodorovici said on Wednesday, ahead of a meeting with banks’ representatives which he said could dispel fears and uncertainty.

Romania’s Social Democrat government approved the tax in December via emergency decree, alongside a raft of other levies on energy and telecoms firms, without an impact assessment or public debate.

The decree pushed Romanian asset prices to multi-year lows and drew criticism from employers, labour unions and also international lenders such as the European Bank for Reconstruction and Development.

“We will meet the Romanian Banking Association today to discuss and see how to act so that at least in the banking sector things are clearly understood, fears and unclear aspects dispelled,” Teodorovici told reporters.

The bank tax, which the government says will lower borrowing costs for households, will be paid quarterly and it applies to banks’ financial assets on a progressive basis if three- and six-month money market rates exceed 2 percent.

The central bank has said tying the tax to market interest rates threatened the independence of monetary policy.

The finance ministry and central bank have analysed ways to make the levy less painful, and have considered untying the tax from market rates or linking it to a different reference point, as well as exempting assets from the levy, such as state treasuries or funding lines from international lenders.

“What will result from today’s meeting could be a package,” Teodrovici said. “We are talking about calculating a different reference level, whether (the tax) is tied to it or not, what will be taxed, what legal documents will be modified.”

“The mass of financial assets must be configured in a way that encourages banks to finance the real economy.”

The Romanian leu was up 0.5 percent against the euro.

Energy and telecoms ministers were also discussing potential changes with their respective industries, Teodorovici said, adding he hoped changes to the decree could be presented to the government as soon as possible.

He also said he hoped to present a package of investment-friendly measures in March, which may include a fiscal amnesty, ways for banks to finance the private sector, and a “radical” reduction of deadlines for receiving permits and approvals. (Reporting by Luiza Ilie Editing by Gareth Jones)

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