US Markets

Spain hopes to raise 6.8 bln euros in new taxes, including 'Google tax'

Credit: REUTERS/MIKE BLAKE

Spain's government is proposing new taxes on digital services, financial transactions and plastic packaging in 2021 and a higher levy on sugary beverages in the hope of raising a total of 6.8 billion euros ($7.96 billion), its draft budget showed.

By Belén Carreño

MADRID, Oct 16 (Reuters) - Spain's government is proposing new taxes on digital services, financial transactions and plastic packaging in 2021 and a higher levy on sugary beverages in the hope of raising a total of 6.8 billion euros ($7.96 billion), its draft budget showed.

Spain sent the budget plan, which projects a deficit of 7.7% and an economic rebound of at least 7.2% as previously announced, to the European Commission late on Thursday.

This year, the government expects a recession of 11.2% - the worst since the civil war - and a budget gap of 11.3% due to the impact of the coronavirus pandemic.

Parliament has already given its green light to the implementation of the two more controversial taxes. The so-called Google tax on revenues booked locally by large tech firms such as Google GOOGL.O, Amazon AMZN.O and Facebook FB.O is being adopted across Europe. Washington sees such a tax as a threat to U.S. companies.

The 3% tax on digital services, such as advertising and data sales, is projected to collect around 1 billion euros in 2021.

The financial transactions tax, known as 'Tobin tax', is another European project, led by the German government, and is expected to raise 850 million euros next year in Spain. A 0.2% rate would be applied to transactions of shares of listed companies with a market cap higher than 1 billion euros.

In the context of shrinking tax revenues and record public spending to counter the impact of the pandemic, Spain also plans to create or raise other taxes for potentially harmful products.

It will hike value-added tax on sweetened beverages to 21% from 10%, expecting to collect 340 million euros in 2021, and to raise 1.8 billion euros from various 'green' taxes, such as a tax on plastic packaging.

The Socialist-led minority coalition government hopes parliament will approve the first full-year budget since 2016 after a long period of political instability. Spain had to roll over its budgets for most of the past four years, all but preventing public investment.

($1 = 0.8538 euros)

(Reporting by Belén Carreño, editing by Andrei Khalip and Philippa Fletcher)

((belen.carreno@thomsonreuters.com; +34 91 585 8429;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

GOOGL AMZN FB

Latest Markets Videos

    Reuters

    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

    Learn More