Do Commercial Banks in Poland Pass the Bank Tax On to Their Customers?
Theoretical background: Bank tax was introduced in Poland in February 2016. As a consequence, several banks with assets surpassing certain value need to cope with the additional burden. Purpose of the article: The aim of the research is to verify whether Polish banks that nominally are subject to t...
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| Format: | Article |
| Language: | English |
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Maria Curie-Skłodowska University, Lublin, Poland
2022-12-01
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| Series: | Annales Universitatis Mariae Curie-Skłodowska Sectio H, Oeconomia |
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| Online Access: | https://journals.umcs.pl/h/article/view/14341 |
| _version_ | 1797869117844226048 |
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| author | Andrzej Karpowicz Zbigniew Korzeb Paweł Niedziółka |
| author_facet | Andrzej Karpowicz Zbigniew Korzeb Paweł Niedziółka |
| author_sort | Andrzej Karpowicz |
| collection | DOAJ |
| description | Theoretical background: Bank tax was introduced in Poland in February 2016. As a consequence, several banks with assets surpassing certain value need to cope with the additional burden.
Purpose of the article: The aim of the research is to verify whether Polish banks that nominally are subject to the bank tax indeed shifted onto their clients most of the cost connected with this new levy and, thus, now these are the clients who effectively bear the burden of bank tax.
Research methods: The analysis is based on monthly data for the years 2010–2021, for which a multilayer comparison of performance of banks subject to the bank tax was made from various perspectives: (1) before and after the introduction of bank tax and (2) with remaining banks not subject to a bank tax – which serve as a control sample. The analysis took into account the composition of Polish bank sector, while focusing on the development of: (1) revenues, costs and income from commissions and charges, (2) revenues and income from interest, (3) level of commissions and charges as well as interest imposed on different bank products, (4) banks profitability, (5) their balance sheet total and (6) ROA.
Main findings: The analysis does not confirm increases in revenues of commercial banks and foreign branches following the introduction of the bank levy, whereas the profitability and ROA of these banks worsened significantly. At the same time, the performance of banks not affected by the levy did not deteriorate, which allows to conclude that banks did not manage to shift the cost of bank tax onto their customers. Conclusions are important primarily from the perspective of fiscal policy (they answer the question on effective tax incidence) and supervisory policy (to what extent the introduction of the tax erodes the performance of the banking sector, inhibiting the accumulation of capital determining the level of financial stability). |
| first_indexed | 2024-04-10T00:07:37Z |
| format | Article |
| id | doaj.art-458e027b898d49aca566dafabf17af92 |
| institution | Directory Open Access Journal |
| issn | 0459-9586 |
| language | English |
| last_indexed | 2024-04-10T00:07:37Z |
| publishDate | 2022-12-01 |
| publisher | Maria Curie-Skłodowska University, Lublin, Poland |
| record_format | Article |
| series | Annales Universitatis Mariae Curie-Skłodowska Sectio H, Oeconomia |
| spelling | doaj.art-458e027b898d49aca566dafabf17af922023-03-16T18:59:29ZengMaria Curie-Skłodowska University, Lublin, PolandAnnales Universitatis Mariae Curie-Skłodowska Sectio H, Oeconomia0459-95862022-12-01563618710.17951/h.2022.56.3.61-879894Do Commercial Banks in Poland Pass the Bank Tax On to Their Customers?Andrzej Karpowicz0Zbigniew Korzeb1Paweł Niedziółka2Białystok University of Technology. Faculty of Engineering ManagementBiałystok University of Technology. Faculty of Engineering ManagementSGH Warsaw School of Economics. Institute of Banking at Collegium of Socio-EconomicsTheoretical background: Bank tax was introduced in Poland in February 2016. As a consequence, several banks with assets surpassing certain value need to cope with the additional burden. Purpose of the article: The aim of the research is to verify whether Polish banks that nominally are subject to the bank tax indeed shifted onto their clients most of the cost connected with this new levy and, thus, now these are the clients who effectively bear the burden of bank tax. Research methods: The analysis is based on monthly data for the years 2010–2021, for which a multilayer comparison of performance of banks subject to the bank tax was made from various perspectives: (1) before and after the introduction of bank tax and (2) with remaining banks not subject to a bank tax – which serve as a control sample. The analysis took into account the composition of Polish bank sector, while focusing on the development of: (1) revenues, costs and income from commissions and charges, (2) revenues and income from interest, (3) level of commissions and charges as well as interest imposed on different bank products, (4) banks profitability, (5) their balance sheet total and (6) ROA. Main findings: The analysis does not confirm increases in revenues of commercial banks and foreign branches following the introduction of the bank levy, whereas the profitability and ROA of these banks worsened significantly. At the same time, the performance of banks not affected by the levy did not deteriorate, which allows to conclude that banks did not manage to shift the cost of bank tax onto their customers. Conclusions are important primarily from the perspective of fiscal policy (they answer the question on effective tax incidence) and supervisory policy (to what extent the introduction of the tax erodes the performance of the banking sector, inhibiting the accumulation of capital determining the level of financial stability).https://journals.umcs.pl/h/article/view/14341bank taxbank levyprofitabilitymarket power |
| spellingShingle | Andrzej Karpowicz Zbigniew Korzeb Paweł Niedziółka Do Commercial Banks in Poland Pass the Bank Tax On to Their Customers? Annales Universitatis Mariae Curie-Skłodowska Sectio H, Oeconomia bank tax bank levy profitability market power |
| title | Do Commercial Banks in Poland Pass the Bank Tax On to Their Customers? |
| title_full | Do Commercial Banks in Poland Pass the Bank Tax On to Their Customers? |
| title_fullStr | Do Commercial Banks in Poland Pass the Bank Tax On to Their Customers? |
| title_full_unstemmed | Do Commercial Banks in Poland Pass the Bank Tax On to Their Customers? |
| title_short | Do Commercial Banks in Poland Pass the Bank Tax On to Their Customers? |
| title_sort | do commercial banks in poland pass the bank tax on to their customers |
| topic | bank tax bank levy profitability market power |
| url | https://journals.umcs.pl/h/article/view/14341 |
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