The president of BBVA, Carlos Torres, has affirmed that the banking tax announced by the Prime Minister, Pedro Sánchez, may end up “negatively affecting” consumption, investment and collection , and defends that “the best way to collect more taxes is for the economy to grow.”
In an interview with El Correo , Torres also maintains that digitization has brought many advantages to BBVA customers and has been “key in the pandemic”, an issue that is ” compatible with leaving no one behind , especially groups that have more difficulty adapting to this new formula of interacting and the tools that it entails”.
After pointing out that at a time of “so much economic uncertainty, we must all row in the same direction”, he values that banks have “a key role in supporting society “, something they did “during the pandemic and day by day supporting families and companies through credits”.
“I also understand, and I share, the importance of correcting the fiscal deficit, reducing inequality and protecting the most vulnerable. And for that, greater collection helps. But I think that this is not the most appropriate way ,” he stresses in reference to the tax. to the bank
In his opinion, the best way to collect more taxes is for the economy to grow , since “greater growth implies not only increasing taxes, but also more employment, more investment, more prosperity.”
“We are at the disposal of the Government to find the best formulas for this to happen, because our sector can be a fundamental lever. For this reason, a special tax on banks can end up producing an effect contrary to what is intended, because banking It is a sector that is at the center of the economy, it is a service that enables the rest of the sectors,” he warns.
In his opinion, specific taxes on sectors should be directed at those that generate negative externalities as a way of reducing their use or consumption . “The banking system not only does not generate negative externalities in the rest of the economy, but quite the opposite,” he points out.
For this reason, he believes that “penalizing” an activity such as banking, which represents the circulatory system of the economy and which, “therefore, energizes the rest of the sectors, can translate into a restriction of capital flows to growth projects “.
“Instead of helping there to be more consumption and investment, more growth and more collection, instead of making services cheaper at a time of high inflation, it can end up negatively affecting all these variables. And this is clear from the available international evidence The objective of collecting more with a special tax on the financial sector, which usually ends up generating less long-term economic growth and, consequently, a much lower collection than expected,” he details.
In this context, it highlights that Spanish financial entities already have a Corporate Tax rate of 30%, when “the normal rate is 25%” , in such a way that they have “a higher tax than the rest of the sectors”.
“On the other hand, there is talk of extraordinary benefits, but what has been extraordinary has been the negative interest rates for many years , rates that have led to a negative profitability of the banking system during the last decade,” he says, adding that ” It is not effective to levy a special tax on the results derived from a normalized activity.”
In addition, he considers that the creation of specific taxes for specific sectors, “especially when they are not finalists and do not seek to correct negative externalities, usually generates a supervening uncertainty that can lead to the effect of the tax being contrary to that which is pursued.”
Likewise, he affirms that there is an economic situation of “uncertainty” and it is difficult to know what is going to happen because it depends on issues that can have a very serious impact.
“We came with a very positive moment after covid and, although growth will continue, the effect of the war in Ukraine has been great. And not only economic. First as a human tragedy, which is the most important thing,” he says.
Despite everything, he maintains that they continue to see growth this year , although with a lower rate for the coming year. “It will be a very significant drop compared to the estimates we had a few months ago,” she specifies.
For Torres, perhaps “a technical recession” could occur and “predictably, we will have negative growth in the last quarter of this year and in the first of 2023.” “I return to uncertainty, because if we had gas supply cuts, for example, the chances of a longer recession would be higher,” she warns.
Basque Country and Bilbao
On the other hand, and in reference to the bank’s announcement to locate two companies dedicated to the development and application of digital technology in Bilbao, he acknowledges that the Basque Country and Bilbao, as a city, are very important for the bank since it is “our cradle , the place where we were born”.
“The goal is to cover a hundred technological jobs this year , mainly developers and data engineers. For next year, it is planned to increase those two projects by another hundred jobs . Of the people hired so far, which are just over 60 , 75% is retention of talent . They are young people trained in Basque universities. The remaining 25% is made up of people who have been trained abroad,” he analyzes.
He also underlines that the bank’s activity in the Basque Country is “very important, with a notable presence in private banking”. “We are the first supplier for half of the Basque companies . But we also want to further contribute to making Bilbao a benchmark city in other areas; in culture and technology, in knowledge. And we do that by creating jobs, too with promoting culture. Holding the award ceremony for the Frontier of Knowledge awards in Bilbao has been a success”, he highlights.