European Commission probes Poland's banking tax

Rzeczpospolita daily reported on Thursday, quoting unnamed sources that the European Commission is querying an asset tax Poland imposed on its biggest lenders in February to check whether it is consistent with EU competition law, The cabinet of the eurosceptic Law and Justice (PiS) party, which won parliamentary elections in October, imposed the tax on banks whose assets exceed 4 billion zlotys after pledging to raise welfare spending at the expense of corporations. The tax added to pressure on the mostly foreign-owned banking sector, whose average net profit fell 29 percent last year due to record-low interest rates and increased payments for guarantees and creditor support funds. Citing sources Rzeczpospolita reported the commission had sent a list of queries on the tax to the government and said if it was not satisfied with the response it could launch an investigation. The newspaper said Brussels was not against the tax in general, but had concerns regarding its construction - the levy is imposed on big banks, while small institutions are exempt. Rzeczpospolita said Poland's anti-monopoly office had also received a letter from Brussels.