Position of the AEB and CECA on the Establishment of a Bank Tax to Finance Pensions
Increasing the tax burden on the financial sector would have detrimental effects on the economy
The contribution of the financial sector to sustaining public spending is greater than that of other sectors
In recent weeks, media outlets have reported that the Government of Spain is considering the creation of new levies on the financial sector with the aim of increasing state revenues and, in this way, financing the current deficit of the public pension system.
While the objectives intended to be achieved with these measures can be shared, the creation of new levies on banks does not constitute an adequate solution, as it would be unjust and would lead to collateral detrimental effects on the Spanish economy as a whole.
Thus, it is unreasonable to place the burden of additional income needs of the pension system on a single business sector, especially considering that its weighting in the economy and in corporate profits is around 3%. If the solution to this problem requires increasing public revenues, all agents must contribute to it in an equitable manner.
Additionally, increasing the tax burden on the financial sector would generate a competitive disadvantage for our entities at the European level and would pose an obstacle to the relevant role that this sector plays in economic and social terms, with a particular impact on its contribution to employment and the development of economic activity through the granting of credit.
It should be noted that the financial sector has made considerable efforts in the past to facilitate compliance with the objectives of public deficit and that, moreover, its contribution to sustaining public spending is already higher than that of other sectors of activity (due to the existence, among other measures, of an increased tax rate in the Corporate Tax, a Tax on Deposits of Credit Institutions, or non-deductible VAT expenses).
On the other hand, it is necessary to point out that various requirements have been introduced at the European level under the banking union framework to reinforce the solvency of the financial system, notably contributions to the Deposit Guarantee Fund and the Resolution Fund, which represent a cost for the financial sector that affects results and, therefore, the dividends received by a large base of retail shareholders. The establishment of a sectoral tax would imply an additional cost that would make access to the capital market even more difficult.
Finally, the establishment of a unique levy on the sector could have revenue effects lower than intended and, however, negatively affect its solvency.
