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Spain energy tax to raise 400 million euros less than expected, minister says


FILE PHOTO: Spain’s Treasury Minister Maria Jesus Montero attends a session at Parliament in Madrid, Spain, February 12, 2019. REUTERS/Juan Medina/File Photo

 

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MADRID (Reuters) – The Spanish government will collect 400 million euros ($416 million) less than expected from the revised windfall tax bill on energy companies passed by the lower house in a first reading on Friday, Budget Minister Maria Jesus Montero said.

Some regional parties in northern Spain, where energy companies have a significant presence, had secured a change before the parliamentary vote to exempt large utilities’ domestic regulated activities and foreign operations.

Several energy companies had threatened to take the government to court if the 1.2% levy on power utilities’ sales was approved in its original form.

Initially, the government aimed to raise 4 billion euros in 2023 and 2024 from taxes on energy companies to finance subsidies to help households cope with cost-of-living pressures.

Before the amendments, Spanish power company Endesa, owned by Italian company Enel (BIT:ENEI), said it could take a hit of around 300 million euros a year from the tax.

Investment firm RBC had said that Iberdrola (OTC:IBDRY), Europe’s biggest power company, could suffer an impact of around 400 million euros from the tax following the removal of the regulated business, while the impact for Spanish gas utility Naturgy would be around 300 million euros and around 800 million euros for Repsol (OTC:REPYY).

Iberdrola, Naturgy and Repsol declined to comment on the impact on Friday. Endesa’s cost estimate remains at 300 million euros, the company said on Friday.

Analysts at RBC still see room for energy companies to challenge the tax in court even after the changes.

The tax proposal will now be sent to the Senate where it could be approved as it is or return to the lower house if amendments are made by senators.

($1 = 0.9613 euros)

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