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Spanish windfall tax on banks, energy firms clears first hurdle

Economic Indicators Nov 24, 2022 07:05PM ET
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© Reuters. FILE PHOTO: A picture shows the skyline of Madrid, Spain, June 7, 2016. REUTERS/Andrea Comas

MADRID (Reuters) - An amended windfall tax proposal for Spanish banks and large energy companies cleared its first hurdle in parliament in the early hours of Friday with the backing of the leftist ruling coalition and several regional parties.

Some parties in Spain's northern regions, where energy companies and banks have a significant presence, had already secured before the vote an exemption of large energy firms' domestic regulated activities and foreign operations.

Several energy companies had threatened to take the government to court if the 1.2% levy on power utilities' sales was approved in its original form.

Initially, taxes were aimed to raise a combined 7 billion euros in 2023 and 2024 to help households cope with cost-of-living pressures.

The proposal, passed by 186 votes in favour and 152 against with 10 abstentions, will now be sent to the Senate where it could be approved if the upper house does not add any amendments.

If parties in the Senate introduce additional changes, the lower house, or Congress, would need to debate it again.

A government source said that due to the latest changes in the bill, the 4 billion euros it was initially aiming to raise could be reduced by around 500 million euros.

Earlier this month, the banking tax was also amended to impose levies on the local units of foreign lenders after the European Central Bank warned in a non-binding opinion that the proposal could distort market competition and impair a level playing field.

(This story has been corrected to change the day to Friday instead of Thursday in first paragraph)

Spanish windfall tax on banks, energy firms clears first hurdle
 

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WILLIAM HAGERTY
WILLIAM HAGERTY Nov 24, 2022 6:52PM ET
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heh...they don't get it
 
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