The Spanish leftist government announced this Tuesday an exceptional tax on the profits of large energy and financial groups to offset the measures put in place in recent months in the face of escalating inflation.
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“This government is not going to tolerate that there are companies that take advantage of the crisis to amass wealth,” guaranteed the president of the government, the socialist Pedro Sánchez, detailing before the Congress of Deputies a series of measures to protect purchasing power of the Spanish undermined by high prices.
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Thus, the executive is going “to implement a tax on the extraordinary profits of large energy companies” that will allow the State to collect some “2,000 million euros (USD 2,009 million) per year” in 2023 and 2024, Sánchez specified.
This exceptional tax, intended to mitigate the impact on Spanish public finances of the economic crisis, had been advanced in June by Sánchez, but without at that time detailing the amount or duration of the fiscal measure.
In addition, a temporary tax will be imposed “on the large financial entities, which are already beginning to benefit from the rise in interest rates”, with a duration of two years and which will allow “raising 1,500 million euros (USD 1,507 million ) a year,” Sanchez said.
Several other European countries have in recent months announced exceptional levies on corporate profits stemming from inflation, particularly energy groups, which posted very high profits last year.
For example, the United Kingdom established an exceptional tax of 25% on the profits of energy giants, to help the most disadvantaged households.
Italy, on its side, decided to tax an additional 25% on the profits of large
companies in the energy sector.
The war will force us to promote energy independence, renewables, self-consumption and energy saving. It will be necessary to promote actions such as promoting teleworking or public transport. Acts with which to defend our values and way of life when they are attacked. pic.twitter.com/dumYt93uIg
– Pedro Sánchez (@sanchezcastejon) July 12, 2022
Madrid has adopted numerous measures since last year to try to contain inflation, which reached 10.2% year-on-year in June, its highest level in 37 years.
These include fuel aid, reduction of VAT on electricity or a rise in pensions.
“Since prices began to rise in September last year, Spain has mobilized nearly 30 billion euros (USD 30.15 billion)” to support
companies and their consumers, “that is, 2.3% of our Gross Domestic Product,” said Sánchez.
INTERNATIONAL WRITING
*With information from AFP
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