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Spain to Place Extra Tax on Energy Firms, Banks - PM

Published 2022-07-12, 09:18 a/m
Updated 2022-07-12, 09:18 a/m
© Reuters.

© Reuters.

By Scott Kanowsky 

Investing.com -- Spanish prime minister Pedro Sánchez has pledged to slap a new tax on energy and banking companies in a bid to lessen the blow from a recent spike in energy prices and inflation.

Speaking in an address to parliament, Sanchez said the plan is expected to raise up to €7B in revenue over the next two years through "exceptional taxes."

Oil and gas firms will be levied on extra profits in 2023 and 2024, pocketing the Spanish government an estimated €2B each year. Meanwhile, a new tax on financial institutions is seen raking in €1.5B for Madrid in both of those years.

Sanchez asked companies in these sectors to give any extra corporate windfall from higher prices back to their workers, as he looks to help Spaniards deal with a sharp recent rise in inflation. He called soaring consumer price growth - which hit a 37-year high of 10.2% in June - a "serious illness" that puts the most vulnerable groups at risk.

The announcement sent Madrid-listed shares of some of Spain's biggest lenders, including Banco Santander (BME:SAN) and Caixabank SA (BME:CABK), lower. Shares in Spanish energy company Repsol (BME:REP) also fell into the red.

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