Slovakia adopts 0.4 per cent bank tax

(BRATISLAVA) - Slovak lawmakers on Thursday approved the introduction of a special bank tax as of next year aimed at generating 80 million euros ($110 million) to help cut the public deficit to 3.8 percent of GDP in 2012.

The law, that still needs presidential approval to take effect, introduces a 0.4-percent tax to be applied to uninsured bank deposits as of next year.

"The finance ministry expects the tax will generate 80 million euros per year" in revenue, the ministry's spokesman Martin Jaros said.

And although the country's banking sector is not directly at risk in the European sovereign debt crisis, the proceeds from the new tax will be pooled "in a special fund aimed at the possible rescuing of banks and financial institutions," Jaros said.

Smer-SD, the left-leaning opposition party most likely to win a March 10 snap election, said it wants to raise the tax to 0.7 percent.

In its 2012 budget draft, Slovakia's outgoing cabinet committed itself to slashing the public deficit to 3.8 percent of the gross domestic product (GDP), down from 4.9 percent of GDP this year.

Slovakia plans to cut the public finance deficit -- comprising the deficits of the central government, welfare authorities and municipalities -- to under 3.0 percent of GDP in 2013 to meet the ceiling for the eurozone, which Slovakia joined in 2009.