Spain collects €3 billion in ‘solidarity taxes’ on banks, large energy companies

Madrid’s solidarity taxes on financial institutions and large energy companies that were implemented last year to mitigate the impact of the post-COVID-19 economic crisis has raised over €2.9 billion, €400 million more than initially planned, Finance Minister María Jesús Montero reported on Wednesday.

The positive figures achieved show that the coalition government – of PSOE (S&D) and the left-wing formation Unidas Podemos- “has got it right not only with the figure (the format of both taxes) but also with the collection (expectations),” according to Montero, EFE reported.

Both special levies, which have been in force since January, tax the intermediation margin of large banks and the income from non-regulated activities of big energy companies.

The taxes which the future coalition government of PSOE and the progressive platform Sumar promised to extend over time, have been collected in two separate instalments.

Treasury sources explained on Wednesday that the second payment, made last September, collected €1.453 billion (€827 million from the energy tax and €626 million from the bank tax), bringing the annual total to €2.908 billion (€1.644 billion from the energy tax and €1.263 billion from the bank tax).

The investiture agreement announced on Tuesday by PSOE and Sumar envisages maintaining both taxes and extending them beyond the initially planned two-year period.

However the new coalition government of PSOE and Sumar -in case the acting Prime Minister, Pedro Sánchez is reinstated before the 27 November deadline- will probably make changes and adjustments to both extraordinary taxes to achieve “a higher yield”, i.e. greater revenue, Montero told Cadena SER on Wednesday.

The principle of ‘whoever earns more pays more’

To defend the extension of both levies, Montero (PSOE/S&D) recalled that Spain’s major financial institutions, including among others Banco Santander and BBVA, and large companies in the energy sector, including Iberdrola, Repsol and Naturgy, have made record profits, and should therefore contribute more.

Almost coincidental with the Minister’s radio interview, Banco Santander reported on Wednesday morning that it had made a profit of €8.143 million up to September, 11% more than in 2022: the highest figure in its history.

A few large energy companies and some large Spanish banks have filed appeals in court to try to repeal both taxes.

Despite this legal challenge, the minister reiterated she was confident that the executive will win all the appeals, and that both measures will be maintained and reinforced.

“I hope that justice will prove us right. We legislate on the basis of legal certainty. We have always said that it is reasonable for those who have more to contribute more. It is to contribute to the common good. It seems that we have got it right”, Montero told Cadena SER on Wednesday.

Last February, Montero explained that these two taxes, together with the “solidarity tax” on large fortunes (over €3 million) aim to advance “fiscal justice” and fight against inequality in the country.

(Fernando Heller | EuroEFE.Euractiv.es)