Experts believe the proposal is “inconsistent” and warn of its danger as any government can “finger sectors to charge fees”
Criticism of the tax on banks and electricity companies that the government has proposed to pay for the series of social measures against inflation does not only come from those affected. In an analysis of these new taxes, the Foundation for Applied Economic Studies (Fedea) made it clear on Monday that these sectors are not benefiting the most from rising inflation and criticized the measure.
Fedea director Ángel de la Fuente assures in the report that the proposal from PSOE and United We Can has no “minimally consistent” reasons, as the only argument put forward is that the Ibex banks and energy companies are making “a lot of profit” to have. (according to government data, respectively, 20,000 million and 9,000 million in 2021) and that they are likely to increase in the future.
But according to his calculations, when these high profits are measured against the capital invested, calculating the return on equity, “neither banks nor energy companies will be among the most profitable sectors in 2021,” he says. On the contrary, industry, commerce and hotel have “markedly higher” returns, about two points higher. In addition, the information and communication (ICT) sector has a profitability that is double that of the banking and energy sector.
In that sense, they believe that this new temporary tax (for 2022 and 2023) “arbitrarily” captures these new extortions “by hand” and sets two “very worrying” precedents, which would allow any government majority to “work with the to allocate specific burdens or requirements of a very significant amount to sectors.
The controversy has been revived by Repsol CEO Josu Jon Imaz, who, in a forum published in El País on Sunday, denounced the tax as “contrary to business activity”. The CEO predicts it will “damage” companies’ investment capacity, affecting the country’s competitiveness and modernization. In his opinion, this tax is “not for the rich” and encourages the government to “be brave” and raise income taxes for those who have the most.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
