Banks revolt against the extension of the tax on the sector: "It has effects on credit and job creation"

The banks reject the extension for another year of the tax on the sector announced on Wednesday by the President of the Government, Pedro Sánchez, as part of the royal decree of anti-crisis measures approved by the Council of Ministers. "This tax has negative effects on the generation of new credit, job creation, economic growth and financial stability, in a context of international economic uncertainty," reads a statement released this afternoon by the AEB (Spanish Banking Association) and CECA employers' associations.

The tax on financial institutions is levied at 4.8% on the interest and commissions of all Spanish entities with a turnover of more than 800 million euros in 2019. The tax came into force in January 2023 and was due to be in force until the end of 2024, but the Executive has agreed to extend it to 2025 as well - with reference to the 2024 results - although it has not given details about its content.

In the sector, it is understood that the tax will be applied with the same characteristics, but they are waiting to know the content of the regulation once it is published in the Official State Gazette (BOE) to confirm it. Even so, their rejection is total and follows the line of what they had already manifested since their creation. "The decision to extend the levy negatively affects the competitiveness of the banking sector and confidence in the country, given that investors demand legal stability, predictability of rules and transparency," reads the statement from AEB and CECA.

In addition, they recall that "the European Central Bank has also already warned about the potential negative effects of this type of tax" and regret that the Executive has not kept its word to review it as it had promised. "The decision of the Executive does not meet the obligation to review after two years the temporary tax contained in the law that created it based on, among other factors, the situation of the sector at that time and the cumulative effect of said tax together with the Corporate Income Tax, and occurs without the courts having yet ruled on the appeals filed by the banking associations."

In this sense, all the entities in the sector, individually, have filed appeals against the tax and are awaiting the resolutions that may come out of the courts. Until then, all of them have fulfilled their payment commitments and assure that they will continue to do so without hindrance to continue with the legal battle.