Spain mulls 2023 tax on large fortunes amid ‘tax battle’ – EURACTIV.com

The government is working on a temporary tax on large fortunes to be implemented as of January 2023, announced Spanish Finance Minister María Jesús Montero (PSOE/S&D) on Thursday after centre-right opposition Partido Popular (PP/EPP) had launched a series of tax reductions in regions ruled by them.

The new temporary tax for large fortunes is in line with a previous proposal presented by PSOE’s coalition partner, left-wing Unidas Podemos (Gue/NGL), Montero said on Thursday without disclosing any further details.

The minister defended the need to “ask for a greater effort” from those with extraordinary benefits, such as large energy companies, and people earning “higher incomes,” EURACTIV’s partner EFE reported.

The move comes after Partido Popular announced the suppression of the property tax in Andalusia (south), a region ruled by the party, as a means to attract investments from other Spanish provinces and abroad.

Additionally, other Spanish regions ruled by the PP, such as Murcia (southeast), have followed the party’s initiative.

The minister did not disclose details of the new tax because, she said, “we have to let the technicians work” and added that it would be temporary, just like other extraordinary taxes recently approved by the Spanish Government on large energy companies and banks, which will be in force for two years and which are expected to collect some €7 billion.

Montero did not reveal whether the new tax on large fortunes will be included in the 2023 budget, although she suggested that Spanish public accounts will not be used to implement the levy.

The new tax would differ from the current property tax, which in Spain taxes wealth over €700,000, excluding €300,000 of the habitual residence.

However, the “tax battle” between socialists and conservatives goes beyond the temporary tax on large fortunes.

This week, European Commission sources reminded the Spanish Government that it is committed to tax reform which, according to the National Recovery Plan, should be implemented at the beginning of 2023.

In May 2023, Spain will hold municipal elections, considered the first litmus test for Prime Minister Pedro Sanchez’s governing coalition with Unidas Podemos. After that, the parties will have to face the general election set for December next year.

(Fernando Heller | EuroEFE.EURACTIV.es)

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