Emergency Ordinance 118 introduces a tax on revenue for energy companies and differentiated taxation for bank assets depending on the level of the ROBOR rate, which means it hurts the most representative sectors on the Romanian stock market: banking and energy.
“This tax (2% on revenue i.e.) in the energy sector will be levied on generation companies, distributors, transmission companies and suppliers, which will impact the electricity bill in several ways: the electricity buying price, the transmission and distribution tariffs and the price of the supply services,” says Irina Railean, financial analyst with Banca Transilvania.
The government decided for a differentiated taxation for bank assets if the quarterly average of ROBOR goes above 2% per annum, but it is yet unclear how it will calculate the tax, if it applies to quarterly or year-end assets. A ZF analysis shows banks could pay 5.3 billion lei (over EUR1.1 billion) if the former scenario is chosen and RON1.3 billion in the latter.
“This taxation will most likely lead to a higher borrowing cost. This may lead to a potential drop in demand and a decline in the volume of lending. We expect to see banks transfer this financial burden into their operations over the coming period, such as interests, fees,” says Maria Vlad, financial analyst of stock broker BRK.
(English version by Loredana Fratila-Cristescu)