The Dutch parliament’s lower house has approved a proposal to raise taxes on banks and add a levy on share buybacks.

The news sent bank shares sharply lower, with ABN Amro NV and ING Groep NV losing about 4%. While it’s not clear that the motion will win over the Dutch senate, it adds to concern that European banks face stiffer taxes as governments look for funding for lower-income households that are being squeezed by inflation.

The proposals were approved by a majority of Dutch lawmakers late Thursday. In a statement, the government estimated that adding a 15% tax to stock buybacks would raise €1.2 billion ($1.3 billion). The bank levy is projected to bring in an additional €350 million.

What Bloomberg Intelligence Says:

“The Dutch parliament’s proposed tax on share buybacks — set at the 15% rate applied to dividends — and raised banking levy are the latest in a string of tax-grab policies as governments seek to claw back some of the earnings boost lenders have enjoyed from interest-rate hikes.”

- Philip Richards, BI banking analyst

The Dutch taxes follow similar measures in Italy, where Prime Minister Giorgia Meloni’s cabinet approved a surprise tax on the “extra profits” of banks this year.

Outgoing Dutch Prime Minister Mark Rutte criticized the proposals. If the motion becomes law, “then companies would very likely move to other countries and the revenue would not be generated,” he said in the parliament on Thursday. “You run the same risk with the bank tax. This would lead to the departure of banks, we are convinced, to Frankfurt, for example.”

ING shares sank 5.3% to €12.46 and ABN Amro lost 4% to €13.11 as of 11:11 a.m. in Amsterdam.

--With assistance from Thyagaraju Adinarayan.

(Updates with further details throughout)