Spain reinforces anti-crisis measures with a new tax on electricity companies

The Spanish government announced this Saturday a new tax on energy companies, similar to other European countries, within a series of reinforcement measures to those it already applies to alleviate the inflationary escalation aggravated by the war in Ukraine.

The President of the Spanish Government, the socialist Pedro Sánchez, announced these new measures after an extraordinary meeting of the coalition Executive that he shares with the left-wing formation United We Can.

Sánchez explained at a press conference in Madrid that measures in force since last April 1 will be extended until the end of the year, such as a state subsidy of twenty euro cents per liter of gasoline and diesel, to which are added other new ones that include social assistance with which to face the increase in the price of the shopping basket.

The cost to the Spanish State of these new measures will be around 9,100 million euros, which, together with those already in force, will total around 15,000 million at the end of 2022, according to data from the Executive.

However, the new tax on energy companies will not be applied until 2023, since it will tax the extraordinary profits of these companies during 2022 as a result of the rise in energy prices.

"It is a measure that is in tune with public opinion in our country, with similar measures in neighboring European countries."such as Italy or the United Kingdom, "and that attends to the recommendations of different international organizations such as the European Commission itself, the OECD and the IMF"said Sánchez, who did not specify how this new tax will be.

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The aid that will be applied soon includes 200 euros for employed, self-employed and unemployed workers with incomes of less than 14,000 euros per year, the freezing of the price of the butane cylinder and the 50% reduction in transport passes for State ownership like the train.

To this is added the reduction already announced this week of VAT on the electricity bill from 10 to 5% and the 15% rise in non-contributory retirement and disability pensions, which will mean 60 euros per month and 360 at the end of year.

Sánchez stressed that the cost to the State represents more than one point of GDP but it will serve to contain Spanish inflation by 3.5 points, 8.7% in May after it touched 10% in March, the highest rate in Spain since 1985.

The objective, he indicated, is to protect families, the working middle class and cushion the impact of inflation in strategic sectors of the economy, while the economic and social costs of the war are distributed in a fairer and more equitable manner. .

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