The Government is rethinking the extraordinary tax on large energy companies depending on the situation once the one currently in force expires. The third vice president and minister for the Ecological Transition, Teresa Ribera, has stated since the Dubai climate conference, COP28, that in the absence of extraordinary profits from these companies as a result of the increase in prices, this tax figure does not make sense.
“It is important to determine whether or not those extraordinary benefits that were trying to be identified in that figure continue to exist,” said Ribera, where he has been with world and business leaders for days. “The usual taxation can be corrected, modular, but we are no longer talking about extraordinary benefits, we are talking about something else,” he added in statements to the Efe agency.
The number four of the Executive has assured that “if there are extraordinary benefits, let’s see how we can contribute” to prevent “some from earning a lot” and the rest from paying more. “And how can you ensure that you maintain or increase that reinvestment,” she explained in reference to the energy companies, which appealed the tax before the National Court.
The Government’s economic area is working on possible scenarios once the tax expires, Executive sources report. “We are analyzing what the factual references are, what the needs are and what is the best technically way to resolve this matter,” Ribera noted, for his part. The Government’s philosophy is that the ecological transition should be an agile process but also “fair” from the point of view of “sharing of benefits and costs.”
The changes in the extraordinary tax on energy companies were anticipated by Ribera herself in an interview with Colpisa last Sunday. “You have to strike a very sensitive balance. Obviously today’s conditions are not those of a year ago. We have to guarantee equity in the contribution of these companies to the budget and at the same time that they have the capacity for reinvestment,” the third vice president advanced.
“The debate is to see if there are still extraordinary benefits as a result of the rise in raw material prices. And if they exist, what is the reasonable threshold for them to contribute to the maintenance of the social shield knowing that the most beneficial thing is always to accelerate the transformation of the energy system,” he noted.
The extraordinary tax taxes sales of energy companies with income exceeding 1,000 million annually at 1.2%. It is in force during 2023 and 2024, although it applies to the income statements for the years 2022 and 2023.
Between the two payments already settled for the energy tax, which affects large companies such as Iberdrola, Repsol, Naturgy and Endesa, among others, the Tax Agency collected 1,644 million. Revenue estimates were 2 billion. The Treasury hopes to improve these figures during the current year because business profits are being higher.
The coalition agreement sealed between the PSOE and Sumar contemplates the review of the extraordinary tax on energy companies, along with that of banks, “with the aim of readapting and maintaining them once their current application period expires, so that “Both sectors continue to contribute to fiscal justice and the maintenance of the welfare state.”
