Romania Mulls Bank Levy Under $2.4 Billion Tax Drive for Budget

(Bloomberg) -- Romania unveiled surprise measures, including a levy on the foreign-dominated banking industry, to boost revenue by 10 billion lei ($2.4 billion) and narrow a budget shortfall that’s in danger of breaching European Union limits.

Finance Minister Eugen Teodorovici said the government plans a tax on banks’ financial assets and on energy companies, as well as increases in tobacco excise and telecommunications fees, while capping natural gas prices for three years starting in 2019. The steps aren’t included in next year’s budget, which will probably be approved in the coming weeks, he said.

“The government should have taken these measures a long time ago,” Teodorovici told Antena3 TV late Tuesday in an interview. “They’re quite bold.”

If implemented, the plans could help offset giveaways by the ruling Social Democrats such as repeated hikes in state salaries that have weakened the fiscal position. They echo similar moves by eastern European countries such as Hungary.

Romania’s banking sector is mostly controlled by western European lenders including Erste Group Bank AG, Societe Generale SA and UniCredit SpA. The natural gas industry is largely split between OMV Petrom SA, controlled by Austria’s OMV AG, and Romgaz SA, majority owned by the state.

The bank levy -- labeled a “tax on greed” by Teodorovici -- would generate 3.6 billion lei next year. It would protect citizens from higher loan-repayment costs, kicking in if interbank rates exceed 1.5 percent, the minister said.

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