AKEL Moves to Tax Unexpected Bank Profits to Aid Borrowers
In a recent development that could bring relief to many borrowers, the General Secretary of the AKEL Central Committee, Stefanos Stefanou, has put forth a legislative proposal to the Parliament. The proposal targets unexpected bank profits that have surged as a result of rising interest rates, causing financial strain for numerous households and small businesses.
The initiative emerges as a response to the government’s perceived inaction on the issue of loan accuracy and interest rates. AKEL has taken matters into its own hands, declaring its intention to provide “tangible solutions to alleviate society’s burdens.” The proposal includes a 5% special levy on net interest income for 2023 and 2024. This measure is designed with safeguards to ensure that the additional cost is not transferred to borrowers.
The anticipated revenue from this levy is expected to be substantial, with projections of around €50 million annually. These funds are earmarked for a special purpose: to finance interest subsidies for housing loans, specifically targeting middle and low-income earners who are struggling with their loan installments due to interest rate hikes.
AKEL’s stance is that the government has not fully grasped the extent of the pressure exerted on households and small enterprises by the increasing interest rates. Banks, on the other hand, have reportedly reaped unexpected profits, surpassing €1.1 billion in 2023 alone. The party argues that it is imperative for the state to step in and ensure that a portion of these profits are redistributed to assist those in need.
The proposal by AKEL is not just about taxation; it’s about providing a lifeline to thousands of households and small businesses. By channeling the funds from the special levy into interest subsidies, AKEL believes it can offer real relief and a more equitable financial landscape in light of the current economic challenges.
