Central bank: windfall levy on banks will not become long-term

The solidarity levy on banks will not turn into a long-term tax as it targets a variable share of banks’ profits, the head of Lithuania’s central bank says.

Meanwhile, long-term taxes aim for fixed shares of corporate profits, according to him.

“When a decision comes along saying that a tax will no longer be temporary, it is always proposed to do something with a fixed base,” Gediminas Šimkus, board chairman of the Bank of Lithuania, said on Friday.

The banking sector maintains very high profitability and earns large profits, which should last for the nearest period, he said.

“We are precisely targeting that part of economic rent,” said Šimkus.