The Government rules out making changes to the temporary tax on banking
The Executive assures that it will carry out a rigorous analysis of the opinion recently published by the European Central Bank (ECB) about the temporary tax that the Spanish government wants to impose on the banking sector. However, he stressed that the report presented is not binding.
Government sources have clarified after learning of the ECB report – where it says that the Spanish tax on banks can weigh down credit and advocates that it can be passed on to customers – that the European body does not issue an opinion against the tax, but that makes recommendations and pronounces on technical aspects of the standard that it considers necessary to clarify. According to the Executive, these are relevant considerations for any tax of this type that may be developed in another country, noting that all the considerations set out by the ECB were taken into account by the Spanish Government before making the proposal.
Montero subtracts importance
The Minister of Finance and Public Function, María Jesús Montero, has downplayed the importance of the ECB’s opinion and has advanced that since the government does not contemplate changes on the processing of the bill that this Thursday has been debated in Congress. In the corridors of the Lower House, Montero commented that the ECB report “is very clear” in the sense that it does not propose the suspension of the tax on financial entities.
The minister recalled that before launching this bill, the Executive has evaluated the margin of the banks to be able to address this “patrimonial benefit”. She also recalled that has a temporary character of two years and which, in turn, proposes that the costs derived from this levy can not be passed on to the financial client to the interest margin and the commissions of the banks.
“The ECB raises the general considerations to which we are accustomed,” Montero commented in the corridors of the Lower House, also adding that within the report there is no topic that advises a change in the taxbut it is simply a figure “to be evaluated”.
Increase in profits due to rate hikes
In relation to the situation of financial entities, the Executive highlights that the results that are being known these days point to a strong increase in profits in the first nine months of the year as a result, among other things, of the rise in interest rates and that the remuneration of deposits is still contained.
Thus, the Government concludes that the banking sector is in a very solid position in terms of solvency and does not expect the new tax to have a significant impact both because of its temporary nature and because of its calibration and design. Finally, in relation to competition, the Government understands that the time horizon of the tax minimizes any distorting effect.
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