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Diesel to be Taxed in 2019

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The president of the Government, Pedro Sanchez, has advanced the preliminary draft of the state budgets for 2019, which includes a tax on diesel fuel.

During a radio interview with Cadena SER, Sánchez has said that the tax on diesel is part of the overall plan of sustainability and environmental protection, rather than a mere money making exercise. Sanchez indicated that there is an important challenge, which is climate change, for which, “Everything that has to do with the country’s energy transition and sustainability, such as private mobility, which is highly polluting, will translate into an increase in tax,” although he went on to add that this tax will not affect transport professionals.

Sánchez was also questioned about the ongoing dispute within the “hyper-regulated” taxi sector, and the problems where private hire vehicles, or “rental vehicles with driver” (VTC), in which “nothing is regulated”, to which the President commented that he wishes to find a “balance point”.

The number of VTC vehicles, those of firms such as Uber and Cabify, are increasing closer to the numbers of marked taxis, despite the officially agreed ration of one VTC to three taxis, on account of additional licences are being granted through court cases, in some areas the balance has become of huge difference.

The ministers responsible believe that this problem requires a solution, “although not definitive, that at they at least introduce rationalisation, fairness and equity in the treatment”, which happens because it is the autonomous communities, and not the central government, that regulate this sector in their respective territories.

In this sense, Sánchez said that the taxi sector was “reasonably” satisfied with the measures announced by the Executive, which will materialise from the Ministry of Development in the “next few” days.

Facing other taxation questions, the President of the Government avoided ruling on whether there are plans to create a new tax on banks, as he had initially indicated, but he did confirm that the Government’s proposal is a tax on financial transactions.

On the other hand, Sánchez insisted that there is a “great” margin to increase the revenue from Corporate Tax and for large companies to contribute more. He has reiterated that the Corporation Tax must have a minimum rate of 15%, because “this is fiscal justice”.

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