The Bucharest Stock market collapsed on Wednesday after on Tuesday Romanian Finance Minister Eugen Teodorivici announced Tuesday night plans to introduce a so-called “greed tax” on telecoms companies, banks and energy utility firms.
Telecoms and energy utility companies will be subject to an additional 3% tax on their revenues and energy companies will also see their prices capped at RON 68 ($16.6) per MWh. The extra tax on banks will be a progressive tax based on the three- and six-month Romanian inter-bank offered rate (ROBOR) and with these rates currently at 3.04% and 3.34% respectively, their extra tax will be 0.9% on assets.
The additional taxes are necessary to cover the government’s already announced plans for wage and pension increases. According to estimates of the Romanian financial press, these taxes will bring in an additional RON 10 billion ($2.45 bln) to the budget.
In the wake of the news, bank papers were the hardest-hit, with Banca Transilvania papers down 20% and BRD down 17%. Energy companies fared somewhat better, but still suffered falls of 9% for Romgaz and 8.77% for Transelectrica. The BET index of the stock exchange plummeted 11.2%.
