Spanish lawmakers discuss controversial tax on banks, energy companies – EURACTIV.com

Lawmakers are set to discuss a bill on Tuesday regarding a temporary tax on banks and energy companies’ profits that could lead to the collection of about €7 billion in 2022 and 2023, which experts have said could be “unconstitutional”.

The coalition of Prime Minister Pedro Sanchez’s socialist PSOE and Unidas Podemos previously agreed on a 1.2% tax on the profits of large energy companies and 4.8% on commissions and net interest of Spanish banks, EURACTIV’s partner EFE reported.

However, the center-right Partido Popular (PP) and far-right VOX, the two biggest opposition forces in parliament, opposed it.

As an alternative, PP’s secretary general, Alberto Núñez Feijóo, proposed to deflate the Personal Income Tax (IRPF), saying it would be a much better way to contain soaring inflation, which in August stood at 10.4%.

At the end of July, Sánchez said that large energy companies and banks “can and must help the country” get out of the crisis, just like Spain helped banks exit the financial crisis in 2008.

However, on Monday, experts of the Spanish Institute of Economic Studies (IEE) warned that these new taxes are “potentially unconstitutional and do not comply with EU laws”, and therefore they can be appealed before the Constitutional Court.

“Despite being defined as an economic benefit of a non-tax public nature, the temporary levy on banks is, in fact, a tax. It has the typical elements of a tax and, specifically, of a tax, given that its factual assumption is constituted by facts that highlight economic capacity, it is managed as a tax, it is reviewed as a tax, and it is paid into the Public Treasury to finance public spending,” the IEE report reads.

In a report published in July, the IEE had warned that the two new taxes could reduce Spain’s growth by some €5 billion and that some 72,000 jobs could be lost.