BNR paid the largest profit tax in Romania: E232 mlnPublish date: 02-12-2009
The budget execution at the end of October indicates that eight percent of the revenues from the profit tax came from the National Bank of Romania (BNR), contributing RON 992 million (some €232 mln) to the state budget. Last year, although BNR posted a profit, the money was used to cover losses registered between 1997 and 2007.
Data regarding the general consolidated budget execution shows that the profit tax generated RON 11.13 billion (about €2.6 bln) worth of revenues, in the first ten months of 2009. "I believe it was about reassessing foreign currency reserves, but probably profit was due to interventions as well. It is good that the National Bank can support the budget. Anyway, the central bank is an independent institution and has no use for profit," said the Chief Economist of ING Bank, Nicolaie Chidesciuc.
Adrian Vasilescu, Advisor to BNR's Governor, told The Money Channel that the profit tax paid by the central bank "does not save the budget, but is helping it." "BNR is the only institution in Romania which does not comply with the flat tax, because the law states that 80 percent of the bank's profit must go to the [state] budget," said the BNR official.
Analyst Bogdan Baltazar previously said that the profits of banks were affected this year by the stagnation in lending and by provisions. "I believe that they will post total earnings of some €200 million in 2009, earnings that will come mainly from operations with the Ministry of Finance," said Baltazar.
Romanian banks marked a profit of RON 680 mln (€160 mln) in the first three quarters of 2009, five times lower year-on-year. "In general and theoretically speaking, central banks that lend to institutions they supervise make a profit. Regarding BNR's contribution to the state budget, I believe that the role of the National Bank is to obtain macro-stability," said Lucian Anghel, Chief Economist of Banca Comerciala Romana (BCR).
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