BUCHAREST, March 20 (Reuters) - Romania’s government could lower a bank tax to a range of 0.2-0.4 percent from 0.1-0.5 percent of banks’ financial assets based on their market share and may exempt some assets from the levy, Finance Minister Eugen Teodorovici said on Wednesday.
The government said the tax, introduced in December along energy and telecoms levies in an emergency decree, had aimed to cut borrowing costs for households.
But the measure, which was announced before European Parliament elections and Romania’s presidential vote due this year, drew criticism from the central bank and ratings agencies.
Teodorovici said banks had until Thursday to assess the latest proposals, and that the government aimed to approve the changes via another emergency decree on March 28.
The tax is progressive, applying to all financial assets if three- and six-month money market rates exceed 2 percent.
Six-month ROBOR rates stood at 2.94-3.30 percent on Wednesday.
Under changes announced by the finance minister, the tax would be uncoupled from ROBOR rates, the money market rates that are also used as a reference point for private loans.
The tax was criticised by the central bank, whose monetary policy independence is threatened by the link to market rates, as well as international lenders, the European Central Bank and ratings agency Standard & Poor’s.
The finance minister told S&P in a letter this month that the government would change the bank tax to make it a fixed rate instead of a progressive levy.
“Depending on market share, the tax will be 0.2 percent (of assets) for banks with a share of under 1 percent, and 0.4 percent for those above,” Teodorovici told reporters after meeting bank officials. The tax base would also be smaller, he said.
Shares in BRD Societe Generale and Banca Transilvania both rose more than 1 percent.
Teodorovici said the changes would include a new reference rate for household loans and conditions to narrow the difference between banks’ interest rates on loans and deposits.
The Romanian Banking Association said it needed time to assess the impact of the latest changes. (Reporting by Luiza Ilie Editing by Edmund Blair)