Spain plans temporary wealth tax to help fight inflation after Ukraine war

Spain's left-wing government said it would slap a temporary tax on the wealthiest 1% of the country's population to help pay for inflation relief measures.

"We are talking about millionaires, those who are in the 1% of income," Finance Minister Maria Jesus Montero told the laSexta television channel on Thursday.

She said it was important that "we can finance the aid" to support "the middle class and workers" but did not provide details on the tax rate or how much it would raise.

The government has introduced a raft of measures to help people cope with soaring prices, such as free public transport, stipends for students to stay in school and subsidized petrol.

The country's annual inflation rate hit 10.4% in August. It has remained in double digits since June, a level not seen since the mid-1980s.

Spain already targeting banks and energy firms

In July, the government introduced a bill to create a temporary levy on banks and large energy companies.

"We are going to use a similar scheme to that for energy companies and banking. For the next two years...the big fortunes of this country will be asked to make a temporary effort," Montero said on Thursday.

She still has to negotiate the plan with her Socialist party's coalition partner Unidas Podemos and acknowledged that parliamentary approval procedures mean it might not be ready by the start of 2023.