THE Foundation for Applied Economic Studies (Fedea) hits the bank tax of the Sánchez Government and the accusations made against him in his last report: “It is rather a GOOD“. The title of the document could not be harsher: The new tax on bank margins, or how not to carry out tax reform. The organization doubts that the measure is constitutional and assures that it is “ideological” and that it responds to the fact that the sector does not enjoy the sympathy of the Executive.
The foundation led by Ángel de la Fuente assured that the “unorthodox route” used in the treatment process was specifically designed to avoid having to obtain mandatory reports both from the competent ministries and other advisory bodies, such as the State Council.
According to Ángel de la Fuente, these reports “could hardly avoid raising serious objections to a proposal of more than questionable constitutionality“. “There are multiple questions that must be carefully evaluated and which surely They advise against the adoption of a tax like the one proposed,” he said.
Thus, Fedea criticizes the fact that the tax was instituted under the pretext of the high profits generated by the time of high interest rates: “Abandoned the excuse for supposed advantages extraordinary, which could hardly justify a permanent tax, among which are the effects of the tax on the availability of credit, on the competitiveness of the banking sector and on the social work of the heirs of the old savings banks.
The blow dealt by Fedea to the government
“The bank tax is difficult to adapt to both the Constitution and the general tax law,” believes Fedea.
In this way, Fedea strikes a major blow to the Sánchez government: “But even before analyzing these questions, the proposal raises very serious problems of principle. (…) A tax ad hoc on a given sector which, in addition, falls on an indicator of gross income instead of profits, already imposed by another general tax, has difficult adjustment both with the Constitution as with the General tax law due to its questionable relationship with economic capacity, lack of generality and risk of double taxation, and might also fail to comply with other fundamental constitutional principlesincluding that of equality and the prohibition of arbitrariness.
For this reason, Fedea considers that Sánchez’s banking tax “is rather a fine for a sector that is hostile to the government majority for ideological reasons than a tax typical of a rule of law. “Creating such a figure does not exactly contribute to strengthening legal certainty, thus discouraging domestic and foreign investment and economic growth,” the foundation says.
“And this way of legislating, impose burdens select certain actors based on ideological prejudices and given their relative negotiating power, it is not the best way to move toward the deep, well-thought-out tax reform the country needs,” he says. Fedea also asks that the Executive come to its senses: “We have time to rectify”.
Therefore, the think tank also warned that the new tax would negatively affect the availability of credit, will reduce competitiveness in the banking sector and will limit the resources allocated to the social work of the entities inherited from the old savings banks.
In particular, the progressive part of the tax, which starts at 1% and can reach up to 6% depending on the brackets, has been criticized by Fedea for its potential to discourage business growth and reduce their efficiency. “A good starting point could be the recent White Paper on tax reformwho sleeps the sleep of the righteous in a drawer of the Ministry of Finance”, explains the organization.
