Latvia: Government may impose surplus tax on banks in 2025

The Latvian government may impose a new surplus profit tax on individual banks as of 2025, Economy Minister Viktors Valainis has announced, LSM reports. The tax could be levied for two years. Valainis argued that the tax would incentivise banks to increase their lending significantly. Banks that increased their volume of lending could then be reimbursed for the amount of the surplus tax, he suggested. Martins Kazaks, governor of the Bank of Latvia, supports the idea, LSM reports. He said that the introduction of a 20% surcharge on corporate income tax for banks in 2023 was a right step. Kazaks noted that the state needs more money for national security.