The first vice president and Minister of Finance, María Jesús Montero, admitted this Thursday that the transformation of temporary taxes on banks and energy companies into permanent taxes is up in the air, despite the fact that it is a commitment in the agreement to form the Coalition government between the PSOE and Sumar.
Montero regrets that if the Executive “does not have a sufficient majority, it will not be able to fulfill the vocation that taxes on energy companies and banks remain over time.” These temporary levies expire at the end of this year. Its renewal is part of the negotiations to approve the General State Budgets (PGE) of 2025.
“The Government’s vocation is to give continuity” to these taxes, which were designed in 2022 as a response to the extraordinary benefits of both sectors due to the inflation crisis and the interest rate increases of the European Central Bank (ECB).
“But the Government is also very aware that it has to agree on it with all the political groups, which have to approve them,” he clarified, in statements to a group of journalists. “We are working to try to convince of the benefits of asking for a greater effort from those who have had greater benefits so that all citizens can enjoy a better housing policy, greater financing of health, dependency and policies that provide equal opportunities,” explained the first vice president.
However, “each political force is free to lend its support,” he added, in reference to Junts’ alignment with Repsol, which is strongly opposed to the tax. The parliamentary group of the independence right of Catalonia once again threatens to break the bloc of the Government’s investiture and to leave it without support to face this commitment.
“Hopefully we have a sufficient majority to be able to continue this tax. Because it seems to us that it is a tax figure that fulfills its function very well and that was even deployed throughout Europe,” concluded the Minister of Finance.
In an article in La Vanguardia with the title Industry or populismthe CEO of Repsol, Josu Jon Imaz, assures that the special tax on banks and energy companies are “populist measures” within a strategy of “lack of social recognition of the value of the company, regulatory overlaps, the suffocation of industry, prohibitions instead of incentives and suffocating fiscal measures that penalize the generation of wealth and employment” that, “under the mantra of social welfare, seriously compromise the future model of this country.”
Special taxes on banking and energy companies raised 2,859 million in 2024 (corresponding to fiscal year 2023). A tax that has not affected Repsol’s performance: in 2022, the oil company obtained the largest profit in its history, 4,251 million, while in 2023, profits were the third best, 3,168 million euros. On the other hand, as part of its pressure strategy, the company has also threatened to take investments outside of Spain.
Escrivá asks that the design be changed
Repsol’s attacks on these taxes have not been the only ones. This week, the new governor of the Bank of Spain, José Luis Escrivá, marked his position in the midst of the negotiation of the 2025 General State Budgets (PGE) between the Government and its partners.
“Our contribution to this debate can focus on design. It would seem desirable to us to change the design of the banking tax with respect to its current formulation, which does not discount provisions and that poses problems in at least two areas. On the one hand, there are banking activities that have more risk, for example, lending to SMEs, but which also have more provisions. To the extent that you do not deduct provisions from the tax base, you may be penalizing in relative terms a banking activity on which taxation should be neutral. As financial entities usually have to make greater provisions during the lowest part of economic cycles, since these provisions are not deducted from the tax, the tax base may not adequately reflect the profitability of the entities,” explains the governor.
This approach is in the same line as that introduced by the Minister of Economy, Carlos Body, who, since spring, has proposed converting the temporary tax on banks into a tax linked to the “interest rate cycle.” What Escrivá calls “neutrality”, the Minister of Economy calls “balance”, which would be achieved by “adapting” the tax that was designed in 2022 in response to the extraordinary benefits obtained by the financial sector due to the escalation of interest rates. official interest of the ECB. A strategy that has sought to stifle demand and economic activity in general (making household mortgages and other loans more expensive) to moderate inflation; and that, along the way, has directly benefited the banks.
Both positions clash with the other part of the coalition government, that of Sumar. This Monday, at a press conference, the economic spokesperson for the party led by Yolanda Díaz, Carlos Martín Urriza, highlighted that “what we want is to maintain taxes and not return them through the back door. It does not seem logical to introduce a gift. “They would not understand that we establish a tax and then make a series of deductions.”
As he added, “within the government partners the distance is great because for us the taxes of the banks and energy companies are non-negotiable.” This Tuesday, Martín Urriza reacted directly against Escrivá’s position on the social network X (formerly Twitter).
“These figures, which were approved at the end of 2022, are part of a fair and progressive fiscal policy of the Government where a greater effort is requested from those who have the most, such as large multinationals through a minimum rate of 15% or large assets through the Solidarity Tax on Large Fortunes,” the Ministry of Finance defended a few weeks ago.
As this newspaper has analyzed on other occasions, the corporate tax has many ‘holes’ that companies, especially the largest ones, take advantage of so as not to pay taxes as much as they should.
“In this sense, both credit institutions and energy entities accumulate record profits, so a greater tax contribution is coherent, resulting in better public services for the social majority of the country,” they add from Haceinda.
The tax on financial institutions affects credit financial entities and establishments whose income from commissions and interests to clients exceeds 800 million euros. In this case, the tax base is the sum of the interest margin and commission income and expenses, and the applicable percentage is 4.8%.
#Montero #admits #taxes #banks #energy #companies #air
