Bulgarian Central Bank Governor Warns Against Tax on Banks' Excess Profits

The proposal to impose a tax on banks' excess profits poses significant risks not only to the banking sector but also to the country’s economic activity and financial stability, warned Bulgarian National Bank (BNB) Governor Dimitar Radev. He made the statement during a celebration organized by the Association of Banks in Bulgaria (ABB) on Bankers' Day, CE Report quotes BTA

The proposed tax, part of next year’s State Budget measures announced by caretaker Finance Minister Lyudmila Petkova, aims to generate additional revenue. However, Radev cautioned that it could lead to reduced and more expensive lending, adversely affecting banks, businesses, households, and the state budget itself.

“This year alone, banks contributed BGN 1.2 billion to the budget. Adding this new demand of BGN 1 billion threatens the financial stability of the country,” Radev stated.

At the event, BNB received praise for its role in ensuring economic stability. Vice President Iliana Iotova described the Bulgarian banking system as “the most stable among the stable” in challenging political times, noting its close alignment with the European Central Bank.

ABB Executive Board Chair Petya Dimitrova highlighted the country’s 2.3% GDP growth, surpassing the EU average, attributing it to responsible and balanced lending practices by Bulgarian banks.