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PRAGUE, Feb 14 (Reuters) - The ruling Czech Social Democratic Party will propose a special tax on banks as part of its campaign for a parliamentary election in October, Prime Minister Bohuslav Sobotka said on Tuesday.
Sobotka's party trails the ANO movement of Finance Minister Andrej Babis, who has opposed higher taxes, by a large margin in polls and is seeking issues to set it apart from its rival.
The two parties entered into government together with a smaller third coalition partner, the Christian Democrats, in 2014. ANO opposition then to higher taxes forced the Social Democrats to give up plans for sector taxes on banks, telecoms firms and utilities.
With a new election this autumn, the Social Democrats want to promote the new taxes to help fund schools and infrastructure, and keep profits from leaving the country.
"We cannot close our eyes to the fact that in recent years more than half of (bank) profits have flowed abroad... We want to change that," Sobotka said.
The party said its proposed bank tax would carry four rates, depending on the size of assets. The top rate would be 0.3 percent for banks with assets of more than 300 billion crowns ($11.8 billion).
It estimated the new taxes, which would be on top of the 19 percent corporate tax rate, could bring in 11 billion crowns ($433 million) a year.
The Social Democrats said bank taxes exist already in 15 other European Union countries, including the Czech Republic's immediate neighbours.
The Czech banking sector is mainly foreign-owned, with the biggest banks owned by Belgium's KBC, Erste Group Bank of Austria, and France's Societe Generale .
The Czech budget posted its first surplus in two decades in 2016 as revived economic growth boosted revenue. The state also invested less due to the slow start of a new round of EU-financed projects.
Babis, a billionaire businessman, founded ANO in 2011 and has appealed to voters with his business-like approach to governance and pledges to root out corruption.
ANO, which surged to second place in the last election at the end of 2013, holds a double-digit lead in polls, putting Babis in a strong position to become the next prime minister.
$1 = 25.4240 Czech crowns Reporting by Jason Hovet; Editing by Mark Trevelyan