Abstract:

In August 2025 the Polish government announced, without prior consultation, a surcharge on the corporate income tax paid by banks: 30% in 2026, 26% in 2027 and 23% from 2028, against a statutory rate of 19%, partly offset by a phased reduction of the asset-based bank levy. This paper treats the announcement as an institutional shock and asks what it implies for the capacity of the banking sector to finance the green transition. Using daily data for the nine banks listed on the Warsaw Stock Exchange and a bank-free benchmark portfolio of twelve large non-financial constituents, we estimate market-model abnormal returns around seven dates in the legislative sequence and link the estimated valuation effect to a capital-based simulation of foregone lending. The announcement produced a cumulative average abnormal return of -7.77% on the event day (t = -12.04; nine of nine banks negative), equivalent to about 32 bn PLN of market value and to 1.1-1.3 times the present value of the tax itself. Cross-sectionally, abnormal returns are not statistically related to our measure of bank-specific tax exposure in this nine-bank sample. This result does not confirm a mechanical cash-flow channel and is consistent with, but does not uniquely identify, a common sector-level institutional-risk repricing. Under the simulation assumptions, the cumulative net tax burden implies 47-135 bn PLN of foregone total lending capacity to 2035 with a 50% payout ratio (and 93-270 bn PLN under full retention), against an annual transition financing gap of roughly 170 bn PLN. These figures measure balance-sheet capacity, not realised green lending.