November 11, 2022 13:30 GMT
Energy Firms Criticise Spanish Windfall Tax Plan
Oil and gas group Cepsa will challenge Spain's planned windfall tax on energy companies in court if the legislation is approved as currently proposed, CEO Maarten Wetselaar said on Friday. Other firms also criticized the planned tax.
- The Spanish parliament is currently debating a bill to establish a temporary levy on banks and large energy companies, aiming to raise €7bn in 2023 and 2024 which would be used to ease cost-of-living pressures.
- The proposed tax on banks carries a charge of 4.8% on bank’s net interest income and net commissions, the levy on energy companies includes a 1.2% tax on power utilities’ sales.
- "This tax is disproportionate and poorly designed because it taxes revenues and not profits, and the two-year span in an environment of high volatility creates tremendous uncertainty", the Cepsa CEO said.
- The European Central Bank has criticised Spain’s proposed windfall tax on its banks, warning it could damage the capital position of lenders, disrupt monetary policy and prove difficult to enforce, according to the FT.