NewsWorldSpain plans temporary tax on big fortunes for two years

Spain plans temporary tax on big fortunes for two years

The Spanish government wants to slap a temporary tax on the wealthiest 1% of the country’s population starting next year amid soaring inflation, Budget Minister Maria Jesus Montero said on Thursday.

She said she was negotiating with the junior coalition partner, the leftist Unidas Podemos, which had the initiative in its electoral programme.

She provided no details on what the tax rate would be or how much it was hoping to raise, telling laSexta television channel only that “we are talking about millionaires, those who are in the 1% of income”.

The tax should be in force next year, Montero said, but acknowledged that parliamentary approval procedures mean it might not be ready by the start of 2023. The government is also planning taxes on energy companies and banks. 

“We are going to use a similar scheme to that for energy companies and banking. For the next two years…the big fortunes of this country will be asked to make a temporary effort,” she said.

Spain will hold local and regional elections in 2023 and is already embroiled in a debate over whether to lower or raise taxes in response to inflation and the economic difficulties posed by Russia’s invasion of Ukraine.

The European Commission has called on Spain to return to a path of fiscal stability as soon as possible, and to strengthen its revenues.

The minister, who is negotiating a draft 2023 budget between her ruling Socialist party, Unidas Podemos and other parties in parliament, said increased defence spending has been a major stumbling block.

The government has increased spending in line with its commitment as a NATO member to gradually reach defence expenditure worth 2% of gross domestic product by 2029.

(Reuters)

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