The Czech government spooked the financial sector in recent weeks by taking up the idea of implementing a bank tax. Proponents of the idea from the Social Democrats party saw it as a way to collect up to CZK 14bn, funds they needed in order to balance the government’s budget. But while prime minister Andrej Babiš seemed to toy with the idea for a while, he seemed to sour on the same type of tax that’s already caused significant harm in other countries such as Hungary and Romania. Babiš has since been trying to replace the bank tax with the creation of a National Development Fund, which would be funded by the country’s largest banks: ČSOB, Česká spořitelna, Komerční banka and UniCredit Bank. The idea has been endorsed by the Czech Banking Association (CBA). The fund would be used to enable investments into rental flats, education, the construction of schools and kindergarten, transport infrastructure, digitalization of the economy and science.
