By KYIV. Sept 15 (Interfax-Ukraine) – The National Bank of Ukraine (NBU) considers additional taxation of banks to be a justified temporary step given the war, seeing financial and legal grounds for this, but proposes to increase the tax rate on bank profits instead of taxing net interest income, NBU Governor Andriy Pyshnyy said.
“For now, we are ready to propose a discussion about what exactly should be the object of taxation. The National Bank, taking into account a number of arguments, ranging from ease of administration to issues of balancing commission interest income, is ready to support an increase in the interest rate of the income tax,” he said at press briefing on Thursday.
According to Pyshnyy, it is this version that the National Bank will discuss in the near future with the parliamentary committee on finance, taxation and customs policy.
“This approach, in our opinion, makes it possible to avoid an undesirable possible effect when, as a result of the absence of additional taxation of commission income, banks begin to carry out their pricing in a certain asymmetric way and commissions begin to grow,” the head of the National Bank emphasized.
He believes that when discussing additional taxation of banks, it is necessary to concentrate not on the level of the rate on NBU certificates of deposit, but on the banks’ delay in raising deposit rates, despite impulses from the NBU, which provided them with a colossal resource and liquidity, “virtually at a zero rate.”
“In the situation in which we all find ourselves due to the forced financing of the war budget, there cannot be only financial winners,” stated Pyshnyy.
He also said that market participants with whom the central bank communicated were sympathetic to this position.
