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Spain's utilities tax suffers defeat in parliament

Spanish lawmakers on Thursday voted to eliminate a short-lived tax on energy business in a. problem for the minority government that still plans to reimpose. the levy by decree, according to the spending plan minister.

The tax, of 1.2% for companies with a turnover of at least 1. billion euros, is among the hurdles the government needs to. clear before it can start negotiating a much-delayed spending plan costs. for next year, but its partners to the left and right are at. chances on the problem.

We will authorize (a decree enforcing the tax) on Monday at. the last cabinet conference of the year, Budget Minister Maria. Jesus Montero informed reporters, including that it was required to. accomplish a larger arrangement on fiscal reform and the budget plan.

The decree would enter into force from Jan. 1, but will require. to be verified by parliament at a later date in order to remain. valid, which might be challenging to attain.

Catalan separatist party Junts and Basque nationalists PNV. have actually argued that such a levy would impact financial investments. On. Thursday, they joined the conservative opposition Individuals's Celebration. in a change to end the tax, a mainly symbolic gesture as. the current levy just lasted until the end of the year.

Left-wing Podemos stated extending the tax and making it. long-term is essential for them to begin spending plan negotiations, while. Basque leftist party Bildu said the government had actually agreed with. them and other leftist celebrations to extend the levy.

Utilities have actually cautioned that extending the tax would. jeopardise 30 billion euros ($ 31.6 billion) in renewable resource. investments.

The government had vowed to work on an irreversible windfall. tax or at least extend the short-term one by another year in. exchange for Podemos support for a wider tax strategy authorized last. month.

The momentary tax was produced in 2022 and aimed at relieving. expense of living pressures for normal Spaniards as banks. benefited from high rate of interest and energy companies got from. a rise in energy rates following the war in Ukraine.

(source: Reuters)