Congress approved this Thursday — with 178 votes in favor and 171 against, of 349 cast in the absence of deputy José Luis Ábalos — the Government’s fiscal reform after an agonizing negotiation, which lasted until the last minute. The approved package of tax measures definitively includes the banking tax, and is linked to the Executive’s commitment to Podemos, ERC, Bildu and BNG to also extend the energy companies’ tax before the end of the year, when the temporary tax expires. designed in 2022.
The coalition Executive has achieved the support of its partners, which, at times, seemed impossible. With the vote in favor of the parliamentary groups of PSOE, Sumar, ERC, Bildu, BNG, Junts, PNV and Podemos, the Government has achieved approval of the transposition of the European directive that sets a 15% floor for corporate tax of multinationals throughout the EU and in other OECD countries.
This minimum unlocks the fifth disbursement of European funds from the Recovery Plan, of 7.2 billion euros, and will increase public income between 2.5 billion and 7.5 billion, according to different estimates. This Government “does negotiate, does process, does legislate laws,” highlighted Alicia Álvarez, PSOE deputy in the debate in the Plenary of Congress, who assured that “democracy continues to win.” Along the same lines, the first vice president and Minister of Finance, María Jesús Montero, has taken the floor to insist that “citizens will thank us.”
The agreement is key as a prior step to the negotiation of the General State Budgets (PGE) for 2025 and to comply with the new EU fiscal rules, which require limiting public spending and reducing the deficit. This pact to move forward with the package has prospered after an agonizing negotiation with Podemos, which was opposed to rejecting any reform that did not include guarantees so that in parallel it would be approved to make permanent the tax on energy companies that expires in December and that has served to raise more than 1 billion this year alone.
Podemos has finally announced its support for the reform after extracting from the PSOE the commitment to draft a joint bill to maintain this tax through a negotiating commission with the investiture partners. And after the socialists assured him that Junts is in favor of creating this tax, although they admit that it contains the tax relief for decarbonization projects that the post-convergents have always demanded.
“The ‘malmenorista’ approach is a mistake: we must support this tax-free reform because it is better than nothing,” the general secretary of Podemos, Ione Belarra, had said from the podium, before announcing the agreement. “This path of the lesser evil takes us directly to a government of the PP and Vox. I ask you to rectify, if you want the votes of Podemos, you have to have imposed on the energy companies,” he added.
Minutes later, Podemos released a statement confirming the agreement. “Fortunately for the country we have an agreement for tax reform which will allow it to be fair, more redistributive and with resources for the welfare state, the security of citizens. Congratulate all groups for their capacity for dialogue. Many hours of work that bear fruit,” said the Minister of Finance, María Jesús Montero in the halls of Congress.
The agreement reached has not jeopardized Junts’ support for this Thursday’s reform. Both the spokesperson, Míriam Nogueras, and the deputy Jordi Crusat from the rostrum have highlighted the agreements they signed with the Government to move the text forward. “There will be a fiscal package with benefits for Catalans and it will be thanks to Junts. In the end, this package is the one that counts,” he said to downplay the importance of the negotiations that have taken place in parallel to this reform. “This agreement will reduce corporate tax by a value of 2.6 billion euros for Catalan companies. It benefits more than 250,000 Catalan companies and will facilitate greater growth in employment,” he said, to also defend the banking tax that they negotiated with the Government and that will allow Catalonia to manage its collection.
“Energy companies have earned 10,000 million euros in one year [en realidad, en solo los primeros nueve meses de 2024]. Banking, 26,000 million. It was completely reasonable that our starting point was that there was a fiscal pact, yes, with a tax on energy companies and a tax on banks. What was our surprise when, after having been negotiating, we were told that the tax agreement on the tax on energy companies had to fall because if not, we would not have a sufficient majority in this Congress. We could not accept this position. If they wanted our support, this tax had to be extended,” said Pilar Valluguera, ERC deputy.
“It seems, gentlemen of the right, that they only know how to govern with a roller. Democracy has become greater, and we need to reach agreements, because this is a plural country and that is reflected in this Chamber,” Álvarez (of the PSOE) later said, while continuing the debate on the law, the content of which has remained for This entire week overshadowed by the dispute over the tax on energy companies.
Carlos Martín Urriza, spokesman for Economy and Finance at Sumar, highlighted that “the European directive has been a historic demand of the left. It’s a big step in the right direction. We are going to be able to raise up to 7.5 billion more”, thanks to the fact that large companies will be prevented from taking a good part of their profits to tax havens, as is happening now.
“It’s as simple as whoever has more, pays more,” summarized Oskar Matute, regarding the spirit of the tax reform. “It is as simple as betting on progressivity and fiscal justice, because if not, all those times in this forum someone breaks their chest saying that inequality is a huge problem and that their vital mission as a political office is to end the inequality, he will be lying,” he said.
From “reform” to fiscal “package”
The approved bill includes a two-point increase in the personal income tax rate on capital income of more than 300,000 euros (which implies an increase of approximately 200 million in State revenue). Also, a reduction in taxes on SMEs and micro-SMEs (for 700 million less income). In addition, some modifications are added to “stop hydrocarbon fraud.” Along with the resolution of the problems generated by “the failed tax reform” of Montoro (the Minister of Finance of the Executive of Mariano Rajoy). A problem that “due to sentences [de los tribunales]” threatened to “give away 5,000 million euros this year to large companies” as Vice President Montero has been warning.
Finally, apart from other minor measures, the 50% limit is extended for two more years to compensate for negative tax bases of the groups that make up a multinational, allowing the amounts not computed to be integrated into the following ten years. Foundations that are part of tax companies are excluded from the application of this measure.
The bank tax
This Thursday, various amendments have been added to this “fiscal package” with other changes in taxes and new taxes. Among them, the bank tax, supported, again, by the groups in Congress of PSOE, Sumar, ERC, Bildu, BNG, Junts, PNV and Podemos. In 2024, the temporary tax on financial institutions raised nearly 1.5 billion euros. This tax was created due to the sector’s record profits, both in 2022 and 2023, thanks to the increases in the reference interest rates of the European Central Bank (ECB).
This 2024, despite the cuts in the official ‘price’ of money in the eurozone since mid-year, interest rates will be on average at maximums or very close to the average level of 2023, supporting another extraordinary year for banks, while many Families have been drowned by their variable interest rate mortgages.
“The tax reform has remained a fiscal package, but we do not have to give up continuing to move forward. Because we face challenges such as the aging of the population, the fight against climate change…”, said Carlos Martín Urriza. “We are not giving up the tax on energy companies, nor a new tax on luxury, on inheritances…”, continued the Sumar spokesperson. As he recalled, “Spain is not a fiscal hell. On the contrary, we are 80,000 million below the European average.”
“Maybe it is not the best agreement, but it is possible,” said Idoia Sagastizabal, economic spokesperson for the PNV in Congress. “This is the agreement that parliamentary arithmetic allows us. “This is a legislature of the lowest common multiple,” he commented. As noted, the PNV had requested two conditions, first that “the approved taxes be agreed upon.” That is, that Euskadi collects and manages them, in the case that corresponds to its training. And that fraud in hydrocarbons be stopped, an amendment that was actually approved this Thursday.
Podemos, PP and Vox frustrate the rise in diesel
Among the rejected amendments, Podemos has added its votes to those of PP, Vox and UPN to frustrate the PSOE’s attempt to eliminate, as of April 1, 2025, the tax bonus that diesel has with respect to gasoline. This rejection translates into a loss of public revenue of nearly 1,000 million.
A handful of measures agreed between PSOE and Sumar have also fallen by the wayside, such as “the end to the tax privileges of SOCIMIs”, the tax on private health insurance or the increase in VAT on tourist apartments.
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