ROME (Reuters) – Two Italian parliamentary committees have approved a government amendment that revisits a contested windfall tax on banks by giving lenders the option to boost their reserve buffers instead of paying the levy, lawmakers said on Wednesday.
The proposed change, formalised by the government last week, received preliminary backing from the industry and environment committees of the upper house of parliament, the Senate.
The measure is contained in a wider decree which is expected to be finally passed by parliament next week.
Under the amendment, the tax targeting banks’ net interest margin (NIM), a measure of profit resulting from the gap between lending and deposit rates, will be capped at 0.26% of risk-weighted exposures.
The new terms favour banks that hold a higher proportion of government bonds among their assets because they carry a zero risk weight.
In addition, instead of paying the tax, banks can boost their non-distributable reserves by an amount equivalent to two and a half times the levy, setting the sum aside in their accounts.
Rome expects the windfall tax to garner slightly less than 3 billion euros ($3.15 billion), officials have previously said.
($1 = 0.9518 euros)
Read the full article here