The Government once again delays the Commission on the tax reform due to the “crossed vetoes” of its partners

The Finance Commission of the Congress of Deputies in which “the fiscal package” must be debated prior to the 2025 General State Budgets (PGE) will not be held this week. After being postponed on Monday, this Thursday it has been delayed again to next Monday, November 18. The Government seeks to buy time to continue negotiating on changes in taxes in the face of “crossed vetoes” between the investiture partners.

The key to the clash is that the PSOE is trapped between its agreements with PNV and Junts and the demands of its left-wing partners. The main point of conflict is the special tax on energy companies that expires at the end of the year and that the Ministry of Finance had agreed to overthrow with the nationalist and conservative forces. But it is precisely this tax that Sumar and especially ERC, EH Bildu and Podemos want to maintain at all costs.

Faced with this blockage, the Popular Party (PP) has offered to support this Thursday in the Finance Commission the Bill that transposes into Spanish legislation a new minimum tax of 15% for multinational companies, if new taxes such as those that the PSOE and its partners have been negotiating. These new taxes are intended to be included as amendments to that Bill that will have to be approved in a Plenary Session of Congress.

The main threat of “crossed vetoes” between the Government’s partners goes beyond “the reform or fiscal package.” If it does not go ahead, next year’s Budgets and also the next disbursements of the Recovery Plan funds are at risk, since the commitment with the European Commission is to continue addressing changes in taxes that improve the effectiveness and equity of our tax system.

The initial pacts of the PSOE with PNV and Junts caused disappointment in Sumar, which this same Monday managed to get another agreement from the socialists that contemplates converting the temporary tax on banks into a permanent tax, a new tribute to luxury and raising two points the Personal income tax on capital income of more than 300,000 euros, among other measures.

However, these agreements have raised eyebrows on the right—including some business sectors—and on the left. And, at least for now, they have not made possible a sufficient majority of support in Congress.