In light of the succession of news reports and public statements regarding the Government’s intention to make the temporary levy on the banking sector permanent, the banking associations AEB and CECA express their strongest rejection due to the impact on the sector itself and on 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 banks and, therefore, for driving the economy, in a context where Spanish banking is the sector at European level that pays the most taxes.
Furthermore, it represents an obstacle 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 advise against these taxes because they divert resources that could be used to strengthen banks’ capital and maintain the flow of credit to households and businesses.
This type of levy has a direct impact on the financing capacity of the real economy and, consequently, on job creation and the growth of our economy. The collection of the levy represents an estimated reduction of €50 billion in Spain in the financing capacity of the banking sector.
If this tax, conceived as “extraordinary,” was justified by the Government due to the growth in income resulting from the rise in interest rates since 2022, that justification is no longer valid. It must be noted that the anticipated evolution of interest rates does not justify converting the temporary levy into a permanent tax. The ECB has begun to cut official rates. Specifically, throughout the year there has already been a reduction of 75 basis points that has been reflected in decreases in the Euribor. The one-year Euribor is currently below the level of December 2022, when the levy was approved. Analysts anticipate that this downward trend will continue next year such that interest rates could stand at 1.75% by the end of 2025.
Finally, the incorporation of taxes into our legal system by means of a decree-law or, alternatively, through an amendment to the articles of a bill currently being processed in Congress, as indicated by the reports, undermines the quality of public debate and makes it impossible for the affected sectors to express their position on regulations that affect their activity.
In short, permanently taxing banking activity with an extraordinary tax means curbing investment, economic growth, and job creation in the economy as a whole.
