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Spain Plans $9.5 Billion in Inflation Aid; Windfall Energy Tax

  • Sanchez government plans new windfall tax on power companies
  • Measures are aimed at reducing CPI by 3.5 percentage points
Gas burns on a domestic oven hob in Barcelona.

Gas burns on a domestic oven hob in Barcelona.

Photographer: Angel Garcia/Bloomberg
By

Spain plans to hand out an extra 9 billion euros ($9.5 billion) in new tax breaks and direct aid to soften the impact of soaring prices threatening the euro area’s fourth-largest economy.

Prime Minister Pedro Sanchez’s cabinet approved reducing the value added tax on power bills to 5% from 10% and handing out 200 euros to vulnerable workers. He said his government will work on new legislation to tax the windfall profits of power companies, starting next year.