WARSAW, Jan 12 (Reuters) - Poland’s proposed bank asset tax may prompt lenders to restructure their portfolios in favour of riskier products, use off-balance sheet activities or transfer assets abroad, the European Central Bank (ECB) said on Tuesday.
Poland’s ruling Law and Justice (PiS) party government plans to tax 0.0366 percent of lenders’ assets per month, excluding government bonds, from February.
The money raised will be used to finance the government’s large-scale social spending agenda.
“The proposed tax’s structure may give financial institutions an incentive to change their risk profile,” the ECB said in a statement, adding that Poland should consider a “comprehensive impact assessment” of the legislation.
The ECB also said that in its current form, the bill could create an incentive for banks to reduce the size of their balance sheets to reduce their tax obligations.
The Polish finance ministry was not immediately available for comment. (Reporting by Wiktor Szary and Jakub Iglewski; Editing by Katharine Houreld)