Poland is not working on tax on interest from banks' required reserves, ministry says

WARSAW (Reuters) -Poland's Finance Ministry said on Friday it was not working on a previously floated idea of taxing interest on banks' required reserves, as banks' shares tumbled following an announcement of plans to hike the corporate income tax they pay.

Warsaw's WIG Banks index fell about 8% in morning trade on Friday after the ministry said Poland planned to raise the corporate income tax levied on banks to 30% in 2026, from the current 19%, to finance increased defence spending.

The rate would be lowered to 26% in 2027 and further to 23% in subsequent years, the ministry said.

In June, Finance Minister Andrzej Domanski said the ministry was working on a new tax which could target interest on required reserves held in the central bank, potentially bringing in 1.5 billion-2.0 billion zlotys ($408 million-$544 million).

However, the ministry said in a post on X on Friday that it was "not currently working on the previously considered solution regarding the taxation of mandatory reserves held at the National Bank of Poland".

Erste Securities analyst Lukasz Janczak said that plan would have had a less severe impact on banks' profits than the increase in corporate income tax, which was announced by the Finance Ministry on Thursday.

It said the changes to corporate income tax for banks would increase revenues by about 6.5 billion zlotys in 2026.

($1 = 3.6759 zlotys)

(Reporting by Alan Charlish and Marta Maciag;Editing by Helen Popper)