The omnibus decree that the last Council of Ministers of the year approved yesterday included the extension of temporary taxes on banks and energy companies during 2024. On this point the coalition did agree. However, the ministries of Finance and the Ecological Transition imposed that the next General State Budget law will include “an incentive” that large energy companies will be able to benefit from in order to reduce their tax bill retroactively from next January 1. January if they make “strategic investments” in industrial decarbonization projects. It was a demand that the sector, led by Repsol, had been demanding, which even warned that this tax “conditions” its investments. The second vice president, Yolanda Díaz, showed her rejection of the decision in the last meeting of the President of the Government, Pedro Sánchez, with his ministers and, then, stated that Sumar does not share that “fair and green taxation is a problem for the investment”. The financial entities, for their part, rejected the extension of the temporary tax and the electricity companies assured that extending it “makes investments difficult.”
Sánchez, who appeared in La Moncloa, after the Council of Ministers, also advanced the Government’s commitment to review both taxes again so that they become “permanent” from 2025. In the same way, a agreement on taxes with the Basque Country and Navarra. The Treasury has collected 2.9 billion with both taxes in 2023.
The coalition Executive also agreed to extend sine die the temporary solidarity tax on large fortunes, which has raised 623 million this year. According to the agreement, it will be extended “as long as the review of property taxation does not occur in the context of the reform of the regional financing system.”
In the omnibus decree, which has a fiscal cost of 5.3 billion, according to government sources, and which will be validated in January in Congress, the Government included the revaluation of pensions in accordance with the average CPI as of November, which was 3.8 %, the extension until June of the VAT reduction on food and the progressive withdrawal of bonuses on energy-related taxes. The tax bill of households and companies will rise from January 1 due to the gradual withdrawal of aid that affects VAT on electricity, gas, the special tax on electricity and the tax on the value of electricity production. Sánchez explained that this decision is motivated by “the gradual fall in energy prices.”
Bonuses for public transport, including free Cercanías, Rodalies and medium-distance train services for recurring users, remain under the same terms during 2024. The Central Administration will also continue to offer a 30% discount on transport tickets dependent on autonomous communities and city councils, aid conditional on an additional 20% discount. This was another point of debate between PSOE and Sumar, since in the conversations it was considered reducing aid to minors, young people and unemployed people. The Government estimates a cost of 1,460 million in aid for public transport over the next year.
Sánchez also announced two new measures yesterday: the elimination of banking fees for older people and people with some type of disability, as well as the transfer of the management of the Minimum Living Income to the autonomous communities that request it.
The President of the Government stated that “the Government will continue the transformative agenda” that it has been implementing during the last legislature. He added that his administration “will never abdicate its main task: protecting citizens with courageous measures when and where necessary.” And he concluded by stating that “there is no dichotomy between social justice and economic growth; “We can grow with social justice.”
In its last meeting of the year, the Council of Ministers approved the extension of the General State Budgets for 2023, pending the presentation of the bill that is already being prepared in the ministries. The fourth vice president and Minister of Finance, María Jesús Montero, advanced a record spending ceiling, of almost 200,000 million, waiting to clear if the PP overturns the path of stability in the Senate.
