The Government manages to gather the support of all its partners and obtains the definitive ‘yes’ to its tax reform

The Government can now breathe easy, at least until its next life or death operation. This Thursday, Congress gave the definitive green light to the Executive’s tax reform, which will now go to the Senate for its final procedure. And he did with the vote in favor of each and every one of the members of Moncloaboth from the right and the left, which represents a very important boost for President Pedro Sánchez, who has managed to avoid at the last moment a defeat that would have been especially painful and would have even called into question the General State Budgets and the future of the legislature.

The bill went ahead with the votes of PSOE, Sumar, ERC, Junts, PNV, EH Bildu, BNG, Canarian Coalition and Podemos. The purple ones were the last to add their votes to the bloc supporting the law: They did it on the same Thursday morningwhen they announced an agreement with the Government to support the tax reform in exchange for extending the tax on extraordinary profits of energy companies throughout the year 2025 – and trying to make it a permanent rate.

This extension, however, must be “compatible with not taxing investments that are committed to decarbonization”, as Junts demanded and as agreed with the Ministry of Finance, as Podemos itself explained in a statement. This implies that the purples, as they already opened to do on Wednesday, They assume that the tax will include a cut in the form of exemptions for those companies that make investments in renewable energy, a safeguard with which Junts aspires to achieve its great obsession: that the tax does not affect Repsol, which has threatened to withdraw money from its plant in Tarragona if it has to pay the tax on its profits, which in 2023 amounted to 3,168 million euros net.

This very open formulation is what has allowed the Government to manage this Thursday to carry out its tax reform with the votes of the allies it has further to its left and further to its right. In fact, the key to the agreement announced this Thursday between the Executive and Podemos is precisely its lack of concreteness: Treasury kicks forward and buys time (month and a half, until the end of the year) to reach an agreement with all its partners. What is in doubt is not whether there will be a tax on energy companies, something that Junts seems to have assumed, but the degree of tax exemption that this will include: the independentistas want a huge deduction, so much so that it almost deactivates the tax, and the purple ones are betting on make it as small as possible.

A package with important measures

In any case, the final definition of the tax on energy companies will be a battle that will take place in the coming weeks, since in the tax reform that received the green light from Congress this Thursday there is no mention of this tax. However, the approved law, without being an in-depth reform of the entire tax structure, does include several important measures, especially the transposition of a European directive to establish throughout the EU a minimum rate of 15% on corporate tax paid by multinational companies, in order to avoid competition between European States that currently causes many very large companies to have their headquarters located in countries like Ireland to pay less taxes.

What was included at the last moment—this Thursday—in the approved law is the extension of the tax on banking extraordinary profits throughout the year 2025. In this matter, Junts has not raised any problems and the PNV has accepted the extension of the tax in exchange for the Government handing over the management of the tax to the autonomous communities. The collection obtained will be distributed to the autonomies in the calendar year following the one in which the tax must be self-assessed. depending on their economic weight.

Likewise, among the tax initiatives included in the law are progressive tax reductions for small and medium-sized businesses, as well as the tax increase on capital incomewhich will grow two points from the 300,000 euros earned through dividends, returns, shares or similar. The groups also approved this Monday to implement a new special tax to tax vapers and increase tobacco taxation, as well as a tax reduction for artists with irregular income.