Latvia: Bank association opposes proposed windfall tax on banks

Latvia’s banking association, Finance Latvia Association (FNA), opposes a proposed windfall tax on local banks, LETA reports. The association argued that the tax was “disproportionate, short-sighted, and nontransparent.” FNA warned that the tax would have negative long-term consequences, hampering Latvia’s growth, competitiveness, and attractiveness for private investment. The tax would oblige the financial sector to cover spending that the government was unable to finance through efficient tax collection, the association stated. If implemented, the windfall tax should be substantially lower and not apply for more than one year, FNA insisted. Meanwhile, Economy Minister Viktors Valainis said that the new tax would encourage lending. Also, he suggested that small banks could be exempt from the tax.