Spain's Tax Overhaul: A Balancing Act in Fragmented Parliament

Spanish lawmakers approved a new tax plan extending a levy on banks and ensuring large companies pay a 15% minimum tax on profits. The plan, passed by a narrow vote, aims to secure European recovery funds. Controversy surrounds the banking tax extension and proposed energy taxes.

In a significant step, Spanish lawmakers have ratified the government's tax plan, which extends a levy on banks for three additional years. This decision comes after intense negotiations with smaller parties in the fragmented parliament.

The tax package, passed by a 178-171 vote, mandates that large companies in Spain with a turnover of at least 750 million euros pay a minimum 15% tax on their consolidated profits, aligning with European directives. The approved plan is pivotal for securing European recovery funds amounting to 7.2 billion euros.

Despite challenges, Prime Minister Pedro Sanchez hailed the legislation as landmark. However, the extension of a windfall tax on banks and a potential permanent energy company tax ignites debate, with banking and utility sectors voicing concerns over competitiveness and investment risks.

(With inputs from agencies.)