AKEL’s initiative for taxing banks’ windfall profits in Parliament

Statement by AKEL C.C. Spokesperson Giorgos Koukoumas

27 April 2024, AKEL C.C. Press Office, Nicosia

Since the government isn’t interested in taking action on the issue of price increases, expensiveness and high interest rates, AKEL is proceeding, as we had stated, with our own initiative in Parliament seeking to provide tangible solutions that will relieve society. The letter of the General Secretary of the C.C. of AKEL for the legislative drafting of a bill proposal for the taxation of the banks’ windfall profits was submitted in Parliament, in order to support the people who have seen their loan instalments skyrocket due to the successive increases in interest rates.

AKEL’s proposal provides for the imposition of an extraordinary levy of 5% on net interest income for the years 2023 and 2024, while setting safeguards to prevent the burden from being shifted on to borrowers. The resulting revenue is estimated at around €50 million for each year and will be channeled into a special fund to finance the interest rate subsidy for mortgage loans for middle and low-income borrowers.

The government has no sense of the magnitude of the pressure exerted on households and small businesses caused by the interest rate hikes, which – on the other hand – have accumulated windfall profits for the banks that exceeded €1.1 billion for 2023 alone. The state must intervene decisively in order to return at least part of these profits to society and this – as it has been proven – will not be done by the government’s pleas to the banks.

AKEL’s proposal will provide a solution and real relief for thousands of households and small businesses.

27.04.2024