The banking sector rejects the permanent tax
In light of the succession of news and public statements regarding the Government’s intention to establish the temporary tax on the banking sector as permanent, the banking associations AEB and CECA express their strongest rejection due to the impact on the sector itself and the Spanish economy.
If this initiative is maintained, Spain would become the only European jurisdiction with a permanent tax of this nature, which constitutes a competitive disadvantage for Spanish entities and, therefore, for the promotion of the economy, in a context where the Spanish banking sector pays the most taxes at the European level.
Additionally, it poses a hindrance to completing the Banking Union and goes against the recommendations of institutions such as the European Central Bank (ECB) or the International Monetary Fund (IMF), which discourage such taxes because they divert resources that could be used to strengthen banks’ capital and maintain the flow of credit to families and businesses.
This type of taxation has a direct impact on the financing capacity of the real economy and, therefore, on job creation and the growth of our economy. The collection of the tax represents an estimated loss of 50 billion in the financing capacity of the banking sector in Spain.
If this tax, conceived as ‘extraordinary’, was justified by the Government due to the growth in revenues resulting from the rise in interest rates since 2022, this justification is now invalid. It is necessary to point out that the anticipated evolution of interest rates does not justify converting the temporary tax into a permanent one. The ECB has begun to cut official rates. Specifically, throughout the year, there has been a reduction of 75 basis points, which has been reflected in lower euribor rates. The one-year euribor is currently below the level of December 2022, when the tax was approved. Analysts foresee that this downward trend will continue into next year, such that interest rates could stand at 1.75% by the end of 2025.
Lastly, incorporating taxes into our legal framework via a royal decree or, alternatively, through an amendment to the articles of a bill currently in progress in Congress, as stated in reports, detracts from the quality of public debate and prevents the affected sectors from expressing their position on regulations that impact their activity.
In conclusion, permanently taxing banking activities with an extraordinary tax means hindering investment, economic growth, and job creation across the economy.
