The Association of Ukrainian Banks presented the results of a study analysing the impact of higher taxes on banks on the economies of several EU countries. The presentation was given by the association’s vice-president, Serhiy Mamedov, who set out conclusions based on international cases.
Overview of the study and list of cases
The authors analysed more than 50 instances of increased taxation of the banking sector in various countries over the past 25 years and examined five examples in detail: Poland, Hungary, Italy, Romania and the United Kingdom.
The paper singled out situations where additional taxes produced fiscal revenues but also had side effects on lending, ownership structure and banks’ market capitalisation.
Poland: the 2016 asset tax and changes in lending
In 2016 Poland introduced an additional tax on bank assets of roughly 0.44% per annum, while banks continued to pay the regular corporate income tax. Serhiy Mamedov noted: “But there is one very interesting detail here. Government bonds were exempted from the new tax. In other words, the system created an incentive for banks to invest in government securities that was more favourable from a tax perspective than increasing lending to business,” says Serhiy Mamedov.
According to the data cited, the volume of corporate lending fell from 17.7% of GDP (GDP) in 2015 to 16.8% in 2019, and later, according to the president of the Association of Polish Banks, Tadeusz Białek, reached a historic low of 12% of GDP in 2024. By contrast, the volume of banks’ financing of the state rose from 16.3% to 19.5% of GDP over the same period, while the share of foreign capital in assets fell from about 59% at the end of 2015 to 42.6% in autumn 2025.
Hungary: a temporary levy from 2010 became long-term
In 2010 Hungary introduced a temporary levy on bank assets with a rate for large banks of about 0.5% (later 0.53%). The International Monetary Fund at the time called the tax disproportionately large.
Later the system was supplemented by a financial transaction tax (2013) and a bank excess-profits tax (2022). In 2026 the latter carried rates of 10% and 30% depending on the size of the tax base. The volume of loans to the private sector fell from roughly 60% of GDP before the global crisis to about 33% in 2016 and remained at 30-35% of GDP in 2024-2025; the easing of tax pressure in 2015 allowed a partial recovery in lending in 2016-2017.
Italy: 40% excess-profits tax and the market reaction
In 2023 Italy announced a 40% tax on banks’ excess profits, after which the market lost about EUR 10 billion of capitalisation. The government allowed banks not to pay the tax in cash but to allocate the amount to a special capital reserve, and almost all large banks did so.
As a result, instead of roughly EUR 3 billion in expected revenues, the budget received virtually nothing. Italy later introduced other taxation instruments, but the initial debate and market reaction demonstrated a significant effect on the sector’s capitalisation.
Romania: the “greed tax”, market panic and weak receipts
At the end of 2018 the Romanian government introduced the so-called “greed tax”, linking it to the interbank interest rate: the higher the rate, the more banks paid. As a result, changes in the cost of money on the market automatically increased the tax burden on the banking system.
The reaction was immediate: in one day the stock index fell by about 11%, and shares of large banks plunged by 17-20%. The government later softened the rules and then abolished the tax; instead of the expected 3.4-3.6 billion lei the budget received about 444 million.
